Could itchy skin be psychological?

Possibly but...: Although the brain can produce sensations associated with itching without a skin condition, the first step is to evaluate the many skin-related causes. Discuss it with your primary care doc.

As noted by others: As noted by others, ruling outmedical causes and allergies would be the logical first step. The skin is an extended part of our nervous system and can very well become itchy or show rashes and reactions to stress. A classic study in psychosomatic medicine involves creating rashes by squirting simple water on an arm which a subject believes contains something they are allergic to.

Itch: Could be physiological, psychological, or effect of medications or irritants (allergens).