Psychology for major markets Nov 5
USD holding near the highs
EUR/USD – Holding near the lows since late July. USD is seeing some general strength helped by some receding hopes of Fed easing.
USD/JPY – USD/JPY held at key resistance area of 154.40 helped by some verbal intervention from Finance minister Katayama, but not backing off significantly. EUR/JPY falling back from all time highs as equities soften.
EUR/GBP – EUR/GBP made new highs again near 0.8830 on anticipation of fiscal tightening and potential monetary easing. Two way risks on BoE meeting this week, with modest EUR/GBP decline likely on the unchanged rate decision most expect.
AUD/USD – AUD gained on expectations of a US/China trade deal and higher than expected Q3 CPI, but AUD/USD has slipped back on general USD strength post-FOMC and some softening in equity prices, and has moved to the bottom half of the 0.64-0.67 range that has held for most of the year.
Equities – S&P 500 slipping back from all time highs without an obvious trigger, although a correction is overdue given high valuations and a slightly less dovish Fed view.