Weekly Forex Market Rhythm | December 13, 2013

EURUSD Daily Chart | December 13, 2013

DOLLAR RISES ON CHANCES OF FED TAPER

The U.S. dollar hovered near a five-year high against the yen and rose against the euro on Friday, while global equity indexes slipped on growing concerns the U.S. Federal Reserve could surprise investors by scaling back its stimulus as early as next week.

While market participants in general expect the Fed to start paring back its stimulus no later than March, a growing number expect a reduction in the Fed's asset purchases may be announced at the central bank's Dec. 17-18 policy gathering.

In the daily chart, the EURUSD is forming a double top. It is a high probability reversal signal. 

It already hit 1.38 round numbers, it is possible that the EU want to catch breath before rallying further. 

A pullback to the midpoint EMA 8 and 21 is seen.

GBPUSD Daily Chart | December 13, 2013

TAPER FEAR NEAR THE TRENDLINE

On the chart above, is shown that the GBPUSD persistently tried to break above the trendline (around 1.65). The Fed tapering fear will keep the GU under it for a while. Any surprise on the Fed's 2013 last meeting next week may sent the GU above the trendline, or more likely, down to 89 day SMA at around 1.5990.

The nearest support seen at 1.6250 and 1.62 round number.

USDJPY H4 Chart | December 13, 2013

The USDJPY uptrend still intact. Seen in the H4 chart, the price is moving along the median lines. 

89 SMA also show solid support for the USD. 

With the imminent Fed tapering issue next week, we still see the US strength and a probability that the price may zoom above the median line, and targeting the upper line (around 105).

However, a break below the lower median line, and SMA 89 will send the UJ down to 101.50, the midpoint of SMA 89 and SMA 200.

Salam,

Arrow