Psychology for major markets July 2nd

EUR/USD – EUR/USD has reversed the post-French election gains, and continues to look essentially stuck near 1.07 ahead of the US employment report.

USD/JPY – USD/JPY uptrend continues helped by JPY losses on the crosses with still no sign of intervention. Downward revision in Japanese Q1 GDP helps maintain negative JPY sentiment, but IMM short JPY positioning rises to highest since intervention in late April.

EUR/GBP – EUR bounce after French election turned sentiment more neutral and stabilisation likely near 0.85 ahead of the UK July 4 election.

AUD/USD – Tone remains mildly positive with RBA one of the more hawkish central banks, but easier Fed expectations still look necessary to break above 0.67.

EUR/CHF – Retaining its more positive tone of the last week after a positive reaction to the French election result, but 0.97 likely to be the middle of a new range so limited scope for further gains from here.

Equities – Valuations getting stretched in the US and Europe reversing post-French election gains.