Aisha Amajida

The market experiences a sharper decline when expectations for positive news are high but go unmet. This phenomenon is not limited to the forex market; even the typically stable stock market is now displaying volatility.

Learning the characteristics of currency pairs will help you understand the pattern of price movement that will help your analysis. Here are the characteristics of the four major pairs in forex trading.

The first surprising news this year came last Friday (10/1). NFP (Non-Farm Payrolls) for December 2013 which was thought will be over 200,000, came out a measly 74,000. This is the worst job created since January 2011. The news shocked the market, and resulted in the fall of USD against all of its counterparts, including the Yen, Aussie, and Gold. It could be said that no one guessed this, because the previous NFP was so good (241,000).

Gold futures trading yesterday (1/1) jotted down as the biggest slump in three decades. Bart Melek from TD Securities in Toronto mentioned that The Fed's tapering and equity market's spectacular performance have worked together against gold. Gold's reputation as safe haven continue to decrease along improvements of economic conditions. Even George Soros and John Paulson have sold their golds. What's up with gold?

In an interview with NBC last night (22/12), IMF director Christine Lagarde said that United States of America has better outlook for 2014. She has good reason for this kind of optimism. Lowered unemployment, the Fed's tapering, and government budget agreement; all of them shows that USA in 2014 will do better. Naturally, better economy means better USD too. Do you think so?

Yesterday, The Fed cuts its stimulus program from 85billion dollar a month into 75billion. As soon as the announcement was made, USD rose in almost all pair, including JPY and AUD, and knocked out Asian currency. Today (20/12), Bank of Japan released its statement for the new stimulus program.

After talking about AUD determinants yesterday, now we want to talk about another interesting topic, that is EURO determinants. Euro strengthens at the beginning of this week after the release of German's manufacturing data. It happened despite of Greek's mess and concerns about France. Why Germany? When at the same time, there are other countries in Eurozone.

AUD exchange rates continue to sink in the last one month. Not only weaken against USD, Aussie also fell to five months low against its neighbor, NZD. From forex news, we can see that AUD is not only impacted by the usual factors that influenced forex, but also China economic reports. How come China partake in AUD/USD trade?

GBP's trading these days expresses cautious market. Yesterday's report mentioned that sterling hold gains on all but two of its rival currency. It reached modest gain on Euro,but down against USD. This is the mark of cautious market. The question is, till when it will go on?

After weeks of predictions and uncertainties, forex market this week will see some realizations. The week's schedule is quite crowded, started by the Tankan report in Japan, going through FOMC meeting in the USA, plus various economic releases and Central Bank Governors speeches. In this kind of circumstances, you could suffer extreme gain and loss, up to whose prediction and which indicator has the stronger influence. Here, we invite you to analyze the attendants of forex party this week.