Psychology for major markets Jan 16
USD still firm, JPY recovering a little on intervention threat
EUR/USD – Continuing to pressure support in the low 1.16s on general USD strength based on solid US data.
USD/JPY – Slipping a little lower on the back of suggestions of possible joint US and Japan intervention, but underlying uptrend still in place
EUR/GBP – EUR/GBP failed to extend decline below 0.8650 after stronger than expected November GDP data, with higher trade deficit weighing on the pound. Upside still seen more vulnerable longer term.
AUD/USD – AUD remains well supported by yield spreads and can continue to press higher but remains dependent on good equity sentiment.
Equities – S&P 500 made a new all time highs on January 13 and remains well supported by solid US data despite overextended valuations and heightened geopolitical risk.