Published: 2024-01-18T11:20:46.000Z
Psychology for major markets 18 Jan

Senior FX Strategist
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USD correcting recent gains but downside looking limited
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.