Psychology for major markets Mar 27

EUR/USD – Still very much rangebound, with support at 1.08 and resistance above 1.09, awaiting some divergence between expected Fed and ECB policy.

USD/JPY – USD/JPY reversed after making a new 34 year high at 151.97, and upside remains restricted by intervention concerns. Yield spreads still suggests significant downside scope, but generally softer USD tone will likely be required to turn the trend lower.

EUR/GBP- EUR/GBP showed a more positive tone post-BoE MPC meeting, with the market seeing more chance of a rate cuts as early as May, but has rejected the initial test of 0.86,. Mild positive sentiment remains, but any gains likely to be slow.

AUD/USD – AUD suffering from regional equity market weakness and gains in USD/CNY, but 0.6450-0.65 area still supports and heavy short positioning evident in the CFTC future data suggests downside limited.

EUR/CHF – CHF fell sharply after the SNB cut rates and has continued to soften. Risks remain on the CHF downside, although downside now more limited as other central banks are likely to follow suit in the coming months.  

Equities – US markets holding close to all time highs helped by strong corporate earnings and the more dovish than expected Fed. Sentiment remains positive despite extreme valuations