Psychology for major markets September 17th

EUR/USD – Risk on the upside short term as market is seeing increased risk of 50bp Fed ease and ECB statement not seen as suggesting an October rate cut. But gains may be reversed if Fed only cuts 25bps.

USD/JPY – USD/JPY made new lows for the year as Fed easing expectations rose, but has seen corrective pressure since. Still scope for further losses if market starts to price in BoJ tightening more in line with recent BoJ statements.

EUR/GBP – GBP edged lower after UK GDP data disappointed, but break above 0.8450 would likely require shift of sentiment towards expecting a BoE cut this week.

AUD/USD – Better risk appetite after equity rally and weaker USD triggered gains above 0.67, but hard to see an upside break to new highs for the year without better China sentiment.

Equities – Focus on the Fed with increased expectations of Fed easing supportive.