Psychology for major markets Jul 31

EUR/USD – EUR/USD continuing to weaken as the trade deal with the US is seen as less favourable to the EU than hoped, and reduced trade uncertainty is seen favouring the USD, correcting the EUR gains seen after the April tariff announcement

USD/JPY – USD/JPY continuing to gain as US equities once again trade to new highs and Ueda indicates BoJ rate hike unlikely to come much before year end.

EUR/GBP – Broke above 0.87 after weaker than expected UK June retail sales, but has slipped back below as UK/US trade deal seen as favourable relative to EU deal. 0.86 nevertheless likely to be solid support.

AUD/USD – Slipping back towards the middle of the year’s range as the USD rallies generally on trade news and RBA rate cut looks more certain after CPI data.

Equities – S&P futures making new highs on strong Meta and Microsoft results, but valuation remains extreme.