Psychology for major markets Jul 14

EUR/USD – EUR/USD sitting just off the 4 year highs above 1.18. Underlying USD sentiment improved with latest data suggesting growth steadying. Focus on tariff announcements suggests EUR downside risks.  

USD/JPY – JPY stabilising at lower levels but remains under pressure as equity risk premia continue to decline and Japan is perceived to be one of the losers from tariffs at this stage

EUR/GBP – Holding above 0.86 with UK growth sentiment weakening and expectations of tax increases in the autumn rise

AUD/USD – Found good support below 0.64 and retains scope for gains above 0.66 after RBA refrains from a further rate cut at this stage.

Equities – S&P futures still close to all time highs and sentiment remains positive, but valuation remains expensive and market looks vulnerable to bad news