Click here to close now.

SYS-CON MEDIA Authors: Liz McMillan, Pat Romanski, Carmen Gonzalez, Kevin Jackson, Peter Silva

News Feed Item

FXPRIMUS Market Brief of the Week: How Low Can Aussie Go?

SINGAPORE, SINGAPORE -- (Marketwired) -- 01/29/14 -- In FXPRIMUS' Market Brief of The Week for 27 January, the brokerage firm's Senior Economist, Jimmy Zhu, discusses how the Chinese economy and next Federal Open Market Committee meeting may influence the market.

Economic Insights

Weak Chinese Economy and Coming Federal Open Market Committee (FOMC) Meeting Could Threaten the Value of Aussie Dollar Again

Aussie traded below 0.87 last Friday afternoon against the Greenback, after the rising credit risk appeared in shadow banking. More regulations may arrive as Chinese government may carry its best effort to avoid default. We have been hearing some relative regulation aiming at the shadow banking sector, but none of these were officially confirmed by the China Banking Regulatory Commission (CBRC). However we believe the recent WPM's case under mining was in CBRC's radar.

Conflicts are everywhere on how to deal with shadow banking in China. We put aside whether the government has enough power to crack down those activities even though we know there are many challenges. If the size of shadow banking decelerated, where is the growth coming from? The recovery of the western economies at this stage is still not strong enough to lift Chinese overseas shipping activities, based on the past six months reading of Chinese exports growth. We have to admit that most of the recovery in western economies is due to the monetary stimulus, benefiting the financial market more than main streets. In other words, demand remains soft. If exports can't help much, the Chinese economy will not grow to a satisfactory level in 2014 given much less local consumption.

China's potential shadow banking concerns not only drags the Aussie dollar, but negatively affects global sentiment as well. Weak manufacturing data in China could reflect subdued global demand. Last Friday, U.S. equities heavily sold off ahead of the key FOMC meeting this week. Dow index was down more than 300 points, booking the worst week since 2012 by losing 579 points, or 3.5%. Lack of fresh catalysts is the main reason triggering price pullbacks, instead of a crisis. Investors are paying full attention to how the Federal Reserve (Fed) elaborates the December payroll data, and whether they would postpone the "January tapering" until economic data returns to expectations.

Here are our expectations on how the market could react according to the FOMC meeting's decision under a few scenarios,


1.  If Fed continues to taper USD 10 billion, we could see equities rebound
    from the recent selling off, and Greenback would gain momentum as well.
2.  If Fed decides to "hold on" first, market could continue to sell off
    U.S. equities in near term, and Greenback shall tumble as well.

Trade Recommendation

USDJPY - Long When Price Rebounds to 101.90

Recent USDJPY rallied mainly reflected traders' mood to seek safe haven currencies such as "JPY" and "CHF", as both of these two rallied against most of the G10 currencies. We seldom experienced this kind of scenario last year due to sound global economic recovery.

However we remain our view that the recent USDJPY slump may offer investors an opportunity to buy the bottom pair, mainly due to,


1.  Seeking safe havens last week due to no fresh catalysts, instead of a
    crisis.
2.  Fed is likely to continue to taper next week, which is positive for the
    Greenback. (If they don't, we may consider adjusting our strategy.)
3.  Bank of Japan may act as early as April to counter domestic tax
    increment.

Based on the H4 chart, the level of 101.90 could be the next support for USDJPY. We would go long if its price reaches this level.


Entry Price - 101.90
Stop Loss - 101.40
1st Target Price - 102.40
 2nd Target price - 102.90

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that BroadSoft, the leading global provider of Unified Communications and Collaboration (UCC) services to operators worldwide, has been named “Gold Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BroadSoft is the leading provider of software and services that enable mobile, fixed-line and cable service providers to offer Unified Communications over their Internet Protocol networks. The Compa...
While not quite mainstream yet, WebRTC is starting to gain ground with Carriers, Enterprises and Independent Software Vendors (ISV’s) alike. WebRTC makes it easy for developers to add audio and video communications into their applications by using Web browsers as their platform. But like any market, every customer engagement has unique requirements, as well as constraints. And of course, one size does not fit all. In her session at WebRTC Summit, Dr. Natasha Tamaskar, Vice President, Head of C...
ProfitBricks, the provider of painless cloud infrastructure IaaS, today released its SDK for Ruby, written against the company's new RESTful API. The new SDK joins ProfitBricks' previously announced support for the popular multi-cloud open-source Fog project. This new Ruby SDK, which exposes advanced functionality to take advantage of ProfitBricks' simplicity and productivity, aligns with ProfitBricks' mission to provide a painless way to automate infrastructure in the cloud. Ruby is a genera...
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the...
DevOps tasked with driving success in the cloud need a solution to efficiently leverage multiple clouds while avoiding cloud lock-in. Flexiant today announces the commercial availability of Flexiant Concerto. With Flexiant Concerto, DevOps have cloud freedom to automate the build, deployment and operations of applications consistently across multiple clouds. Concerto is available through four disruptive pricing models aimed to deliver multi-cloud at a price point everyone can afford.
WebRTC is an up-and-coming standard that enables real-time voice and video to be directly embedded into browsers making the browser a primary user interface for communications and collaboration. WebRTC runs in a number of browsers today and is currently supported in over a billion installed browsers globally, across a range of platform OS and devices. Today, organizations that choose to deploy WebRTC applications and use a host machine that supports audio through USB or Bluetooth can use Plantro...
ProfitBricks has launched its new DevOps Central and REST API, along with support for three multi-cloud libraries and a Python SDK. This, combined with its already existing SOAP API and its new RESTful API, moves ProfitBricks into a position to better serve the DevOps community and provide the ability to automate cloud infrastructure in a multi-cloud world. Following this momentum, ProfitBricks has also introduced several libraries that enable developers to use their favorite language to code ...
What exactly is a cognitive application? In her session at 16th Cloud Expo, Ashley Hathaway, Product Manager at IBM Watson, will look at the services being offered by the IBM Watson Developer Cloud and what that means for developers and Big Data. She'll explore how IBM Watson and its partnerships will continue to grow and help define what it means to be a cognitive service, as well as take a look at the offerings on Bluemix. She will also check out how Watson and the Alchemy API team up to off...
The IoT Bootcamp is coming to Cloud Expo | @ThingsExpo on June 9-10 at the Javits Center in New York. Instructor. Registration is now available at http://iotbootcamp.sys-con.com/ Instructor Janakiram MSV previously taught the famously successful Multi-Cloud Bootcamp at Cloud Expo | @ThingsExpo in November in Santa Clara. Now he is expanding the focus to Janakiram is the founder and CTO of Get Cloud Ready Consulting, a niche Cloud Migration and Cloud Operations firm that recently got acquir...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications U...
SYS-CON Media announced today that @ThingsExpo Blog launched with 7,788 original stories. @ThingsExpo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @ThingsExpo Blog can be bookmarked. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago.
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, will provide some practical insights on what, how and why when implementing "software-defined" in the dat...
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting we...