Psychology for major markets 18 Jan

EUR/USD – Strong USD tone fading slightly but hard to see much USD weakness while geopolitical concerns rise.

USD/JPY – USD/JPY coming off new highs for the year and looking stretched. Any weakening in risk sentiment would suggest scope for significant JPY gains on the crosses.

EUR/GBP – EUR/GBP slipping lower after higher CPI for December. Underlying sentiment GBP positive as UK inflation is perceived to be more persistent than elsewhere.

AUD/USD – Rallying after weak employment data on general USD correction, but employment data and weak China sentiment makes upside scope look limited.

USD/CHF – CHF looks toppish here as SNB turns more dovish and halts FX selling.

Equities – US market holding firm but may be vulnerable to any decline in easing expectations.