Psychology for major markets Aug 22

EUR/USD – EUR/USD dipping below 1.16 on generally firmer USD as markets anticipate less dovish Powell speech following strong US PMI data.

USD/JPY – USD/JPY firmer on strong US data and expectations of less dovish Powell.

EUR/GBP – Failed another test of 0.86 but underlying GBP sentiment still mildly positive after recent stronger data. 0.86-0.87 range for now.

AUD/USD – Found support above key 0.64 area but showing soft tone as USD generally edges higher and market anticipates RBA rate cuts.

Equities – S&P recovered from the post-employment lows to make new all time highs, but downside risks persist if more evidence of US slowdown emerges, with impact of tariffs still to come, or if Fed proves less dovish than currently priced.