Psychology for major markets 25 Jan

EUR/USD – Strong USD tone fading slightly helped by firmer rising global equities. ECB in focus, with market pricing a more dovish view than the ECB has so far indicated, suggesting some EUR upside risks on hawkish comments.

USD/JPY – USD/JPY coming off new highs for the year and looking stretched. Nothing from the BoJ but Ueda’s press conference hinted at potential April tightening, suggesting JPY is likely near the bottom here, with some verbal intervention being heard from the MOF.

EUR/GBP – Underlying sentiment GBP positive as UK inflation is perceived to be more persistent than elsewhere, and UK PMIs continue to outperform.

AUD/USD – Better global equity performance helping the AUD to recover after recent weakness due to China concerns. Gains continue to depend on improving global and regional risk appetite.

USD/CHF – CHF looks toppish here as SNB turns more dovish and halts FX selling.

Equities – US market making new all time highs but may be vulnerable to any decline in easing expectations.