Psychology for major markets Feb 21

EUR/USD – EUR/USD holding near 1.08 with a mild positive tone supported by positive equity market sentiment. But focus on FOMC minutes to determine direction from here.

USD/JPY – USD/JPY holding near 150 with falling equity risk premia and low vol continue to encourage JPY bears, but threat of upcoming BoJ tightening and some risk of FX intervention limit the upside.

EUR/GBP – GBP sentiment buoyed slightly by upbeat comments from BoE governor Bailey, but EUR/GBP upside risks still dominate after weak UK CPI and GDP.

AUD/USD – AUD resilient despite weak employment data helped by strong global equity market performance. But downside risks remain as there is scope for the RBA to turn more dovish.

USD/CHF – CHF falling back after weaker CPI helped by strong equity markets and the SNB no longer providing support.

Equities – US markets remaining close to all time highs but may be vulnerable to any further decline in easing expectations.