Psychology for major markets Jan 29
The greenback take another beating
EUR/USD – The ebbs and flow continue to points toward USD weakness. But the initial euphoric greenback selling seems to be over and we are looking towards choppy Euro strength.
USD/JPY – The sharp correction has turned to consolidation. The fear of joint intervention can only support the JPY for so far as speculators will once again gather strength to challenge the central banks. The pair is waiting for the next leg for major direction but likely a slow grind lower until we have clarity on the February election result.
EUR/GBP – Moderately improved tone of recent UK data had EUR/GBP near the lower end of its recent range. Now looking for a fresh trigger.
AUD/USD – Strong metal is supporting the Aussie. The pair is searching for higher grounds as gold rally to historic high. While a turn could be sharp, USD weakness may cushion any sharp fall in Aussie bids.
Equities – Market participants are repositioning themselves after digesting FOMC. Dip buyers seems to be emerging when U.S. equities slip.