Psychology for major markets Aug 27

EUR/USD – EUR/USD dipping sub-1.16 with the USD generally a little firmer and some concerns about the French Budget ahead of a confidence vote next month.

USD/JPY – USD/JPY rising with the generally firmer USD tone, but remains within recent ranges.

EUR/GBP – Failed another test of 0.86 but underlying GBP sentiment still mildly positive after recent stronger data as UK rate cut expectations are pared back. 0.86-0.87 range for now, but risks mainly on the downside near term.

AUD/USD – Found support above key 0.64 area once again as USD slipped lower after Powell comments and higher inflation data limited RBA easing expectations. 0.64-0.66 range remains hard to break.

Equities – S&P benefitting from lower yields after Powell comments, but any further yield decline is unlikely without clear economic weakness, suggesting very limited upside for equities.