Daily Observations: December 14, 2012


Current Positions:

- Short AUDUSD from 1.0582 (3/4), Stop at 1.0582, Target 1 at 1.0515 HIT, Target 2 at 1.0460, Target 3 at 1.0415

- Long EURCHF from 1.2018, Stop at 1.1990, Target 1 at 1.2500, Target 2 at 1.2750

- Short EURUSD from net 1.3103 (entries 1.3085, 1.3110), Stop at 1.3130 (daily close), Target 1 at 1.3030, Target 2 at 1.2950, Target 3 at 1.2880

- Long USDJPY from 80.65 (1/2), Stop at 82.75 (daily close), Target 2 at 83.30, Target 3 at 84.00

Recently Closed Positions:

- Closed Short AUDUSD from 1.0582 (1/4) at 1.0515 for +67-pips

Time Frame: 1-day to 1-week

I'm making no changes to my game plan although today's November CPI print really threw a wrench into the US Dollar's recent strength, given falling yields as a result of deflation and disinflation. Nevertheless, I like both the technicals and the fundamentals at this point for weakness in the AUDUSD and EURUSD into early next week.

Over the weekend, I'll be watching the Japanese election results on Sunday morning, which should see Shinzo Abe come to power. The former prime minister is also a proponent of unlimited easing by the Bank of Japan, which is the main reason that the Yen has been so pressure recently. If for some reason Shinzo Abe does not come to power, the Yen could be set for a major move next week. We should know the election results by market open, so large gaps in Yen-crosses are likely.

Any other trade ideas and general macroeconomic musings can be found in the Real Time Newsfeed, or by following me on twitter @CVecchioFX.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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