USDJPY - Let Battle Commence!

There's an battle going on between the bulls and the bears on this currency as we are reading completely different stories depending on which time frame you're looking at.

The ST & MT charts paint a pretty bullish picture which still has a valid target of 109.00 yet to be reached, formed from a breakout of a symmetrical chart pattern on the daily candle sticks close to the apex (See more from previous blog post on 10/12/13).  However if take a step back and look further out on the LT chart, we have a (potential) downtrend line being tested from the peaks in 1998 and 2007.  We have already satisfied the 38.2% retracement on this chart, which now brings the 50% level into play at 111.20.

AUDUSD - Broken below the 2013 low already

China's underperformance persists and with economic analysts starting to revise their growth forecast down to levels only seen back in 2005, it doesn't look like this outlook will turn around anytime soon.   Lagging Australian economic results also continue to disappoint weighing further on this currency and with calls that further RBA cuts are required to simulate this heavily commodity driven currency, it might be a case of 'things are going to get worse before it gets better' so to speak.

GBPUSD - Coming under first real sign of pressure

The GBPUSD is testing the trend support line from the July13 rally.  We shall see whether there is further impetus in the next couple of days and drive the currency through this support line.  Disappointing economic data in the new year is making investors wary of whether the markets can sustain their recent record highs in the short term, and seeking comfort in 'safe haven' currencies as of late.

Brent - Still trading in a sideways range

Brent 2014 forecasts range from around $98 - $110, with the main variance of forecasts being derived from the supply risk associated with Opec production. Some analysts think that the supply disruptions that we've seen over the past couple of year should persist whereas others are more optimistic around the supply side leading to lower estimates. The deteriorating political situation in Venezuela and the Libyan militants blocking some of the main ports disrupting exports are causing the most concern at the moment.  We should however continue to see strong demand coming from the emerging markets and Non-opec production driven from US and Canadian shale.