JAPANESE YEN THE TOP PERFORMING CURRENCY ON POTENTIAL BANK OF JAPAN POLICY SHIFT
The Japanese yen currency moved sharply higher against the euro, U.S dollar, British pound and Canadian dollar this week, as the Bank of Japan paired back the size of its monthly JGB bond purchases. Investors moved back into the Japanese Yen currency, as speculation mounted that the BOJ will soon start to reduce its large-scale asset buying scheme, known as quantitative easing. The USDJPY pair reacted quickly to the news, moving below its key 200-day moving average, as traders sold the pair towards the 111.00 level.
The USDJPY pair remains bearish while trading below the 112.05 level. Medium-term downside targets remain 110.84 and 110.00.
A move above the 112.05 level should see buyers press towards the 112.30 and 112.70 resistance zones.
KRONA POLICY BOOST
The Swedish Krona moved to a two-month trading high against the euro currency this week, as the Sveriges Riksbank pointed to a long-term shift in Swedish monetary policy. The Riksbank Governor said the central bank is gradually approaching the moment to start reversing its ultra-loose monetary policies. Analysts noted the announcement from the Riksbank now points to higher interest rates in the Swedish economy, and ultimately a repricing of the Swedish krona.
AUSSIE DATA BEAT
The Australian dollar moved higher this week, as Australian Retail Sales data came in much better than expected for the month of November. Official data from the Australian Bureau of Statistics showed a 1.2 percent monthly increase in spending, which was much better than the 0.4 percent increase forecasted. The AUDUSD pair spiked higher on the news, trading well-above its key 200-week moving average, as buyers pressed back towards the 0.7900 handle.
The AUDUSD pair remains strongly bullish above the 0.7800 level, further upside towards 0.7920 and 0.8000 appears likely.
A move below the 0.7800 level may expose further AUDUSD selling towards the 0.7770 and 0.7715 support zones.
BITCOIN VOLATILITY INCREASES
The price of Bitcoin suffered another week of wild fluctuations, with BTCUSD starting the week on a bright note around the $17,000 level, but eventually fell below the $13,000 level on strong fundamental and technical selling. The drop was sparked by South Korea's plan to ban cryptocurrency trading, sending the number one cryptocurrency by market capitalization reeling lower. The Justice minister of South Korea, Park Sang-ki, said the government was preparing a bill to ban trading of the virtual currency on domestic exchanges.
BTCUSD remains bearish while trading below the $14,600 level, further downside towards $11,800 and $10,400 seems likely.
A move above the $14,600 level should support BTCUSD buying towards $15,100 and $15,700.