Psychology for major markets Nov 21
USD generally firm but JPY correcting recent losses
EUR/USD – USD generally firmer as expectations of Fed easing in December continue to fade and equities continue to correct lower. EUR testing to bottom end of the recent range, but still likely to be well supported in the 1.14s.
USD/JPY – USD/JPY correcting from 9 month highs helped by more aggressive verbal intervention and a dip in equity markets, but JPY remains in a downtrend.
EUR/GBP – EUR/GBP consolidation blow the recent highs awaiting the upcoming Budget on November 26. Risks still look to be on the upside given strong likelihood of a December rate cut if the Budget is tight as expected, while a looser Budget would undermine confidence.
AUD/USD – AUD/USD showed a more positive tone helped by strong labour market data but slipped back with a stronger USD and weaker equities. But there is strong support on a 0.64 handle, and risks are biased upside longer term based on yield spread correlations.
Equities – S&P 500 continues to correct lower with rally on Nvidia results short-lived. Fading hopes of Fed easing in December and high valuations weigh.