Taking a look at the longer-term charts, what jumps out is the durability of the trends late this year. Consider this:

  • USD/JPY up for 8 weeks in a row
  • EUR/JPY higher for 6 straight weeks
  • GBP/JPY higher for 8 consecutive weeks
  • AUD/USD down for 9 straight weeks
  • S&P 500 up in 10 of past 12 weeks

Takeaways:

  1. These trends are the best bets for medium-term 2014 trades
  2. The gains are unsustainable and at the very least I expect to see a couple weeks of quiet activity before they continue

USD/JPY gained for 7 weeks in a row at the end of 2012. The pair went on to gain an additional 1800 pips by mid-May.

If there is a short-term, countertrend trade, it’s long AUD/USD or short EUR/AUD. The weekly EUR/AUD chart shows an evening star pattern on the weekly chart and I expect to see a retest of 1.5000 before the uptrend continues.

EURAUD weekly chart

EUR/AUD weekly