Weekend Analysis – 01.24.2014

By January 24, 2014Analysis

There was a lot of action this week outside of the currency market that directly effected currencies. The big action started after China showed continued slowing in it’s economy. Combine that with the previous news that’s still being digested, namely the slow end of U.S. QE (now known as tapering), and you had a recipe for some nice volatility.

On to the Analysis!

AUD/USD D1 Chart

The Aussie has been taking a beat down via the perception of it’s ties to the nearby Chinese economy. We can see in the chart price pushed up for one last gasp, collecting any orders at resistance, then fell off for excellent profits for any trader astute enough to be following the pair and looking a little deeper at the H4 chart.

audusd-d1-01242014

USD/JPY D1 Chart
The yen has been pummeled most of the past year since the government has instituted continuing currency devaluation policies. It’s currency manipulation by the Japanese for sure, but what can anyone do about it when the US agrees to it? Traders have been rolling with it, making a mint off the carry trade long positions vs most of it’s pairings. I’m not sure the party will be over quite this quick.

usdjpy-d1-01242014

In The News:

Gold Has Longest Run of Weekly Gains Since September ’12 (Bloomberg)

Yen Rallies With Franc on Rout in Amid Emerging Markets (Bloomberg)

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