Welcome!

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
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
Updating DevOps to the latest production data slows down your development cycle. Probably it is due to slow, inefficient conventional storage and associated copy data management practices. In his session at @DevOpsSummit at 20th Cloud Expo, Dhiraj Sehgal, in Product and Solution at Tintri, will talk about DevOps and cloud-focused storage to update hundreds of child VMs (different flavors) with updates from a master VM in minutes, saving hours or even days in each development cycle. He will also...
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it m...
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Jared Parker, Director of Financial Services at Kinetica, will discuss how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich inf...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change the...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.