Psychology for major markets May 12
U.S. Treasury secretary Scott Bessent says U.S. and Japan both believe forex volatility is undesirable
EUR/USD – The Euro rotated lower to retest and has fully erased Monday's recovery. Strong USD bid remain the culprit on geopolitical uncertainty. The Euro looks set for a retest around the 1.17 figure for support.
USD/JPY – The latest round of intervention from MoF has put a lid on USD/JPY. U.S. Treasury Secretary Bessent has met his counterpart and says both the U.S. & Japan believe forex volatility is undesirable. There has been little comment on joint intervention. Right now, the pair is consolidating around the 157 handle but sees rally gathering steam.
AUD/USD – The Aussie will soon retest support circa 0.7190 on poor risk sentiment and soft precious metal performance.
Equities & Others – Broader risk atmosphere is sour as U.S.-Iran exchanges verbal fire and unlikely to bridge gaps. Market participants are left disappointed and will likely be reflected in risk asset price action soon.