Psychology for major markets September 19th

EUR/USD – Risk positive tone supporting EUR/USD rally with yield spreads already pointing higher, but limited scope beyond 1.12 unless we see better Eurozone data.

USD/JPY – Showing some corrective strength as US equity markets make new highs and US yields rise after the FOMC. But upside still looks limited with yield spreads likely to fall further.

EUR/GBP – Moved down after rise in UK CPI but still holding above 0.84. BoE decision in focus, and test of 0.84 may be seen if rates are left unchanged and there are fewer than 2 dissents.

AUD/USD – Better risk sentiment supporting a test of the top of the year’s range at 0.6839, but better China sentiment likely required for a convincing break higher.

Equities – New highs in S&P 500 but valuations looking stretched with yields also higher