Psychology for major markets Jul 09

EUR/USD – EUR/USD sitting just off 4 year highs above 1.18. Underlying USD sentiment stabilising with tariff delay until August 1st seen as increasing chances of trade deals, but risk of reaction to tariff announcements.

USD/JPY – JPY still soft on the crosses and USD/JPY correcting higher as equities remain firm, trade deal with the US seems some way off and Japanese wage data comes in soft.

EUR/GBP – Holding above 0.86 with UK growth sentiment weakening as expectations increase of tax increases in the autumn.

AUD/USD – Found good support below 0.64 and retains scope for gains above 0.66 after RBA refrains from a further rate cut at this stage.

Equities – S&P futures still close to all time highs and sentiment remains positive helped by fading tariff concerns and rising hopes of Fed easing, but valuation remains expensive and market looks vulnerable to bad news