DailyFX.com, the free news and research website of FXCM Inc (NYSE:FXCM), has released its Top Trading Opportunities for 2014. DailyFX analysts look at the lessons learned in 2013, where the market stands today and what could come in the future to suggest trends and trades they will be looking at for this year.

Analysts see the general US Dollar trend as positive
  • Looking Past “Taper” Speculation at Fed vs. ECB Policy Trends

Currency Strategist Ilya Spivak expects the Euro to decline against the US Dollar in 2014. “The bottom line [is that] the ECB stands to become more dovish while the Fed moves in the opposite direction,” Spivak writes. He is aiming for the EUR/USD exchange rate to drop below the 1.32 level as an initial objective.
  • The Other Great Rotation

Currency Analyst Christopher Vecchio sees expansive global monetary easing continuing in 2014, and the prospect of diminishing stimulus may be the key theme. Vecchio expects that the eventual wind down of the Federal Reserve’s QE3 program will put pressure on higher yielding and riskier assets in emerging markets and Asia, helping support the capital rotation from East to West that was apparent through the end of 2013. He also expects the EURAUD and GBPNZD to continue their multi-month and multi-year bullish breakouts over the course of 2014.

Commodity and Asian-Pacific currencies appear vulnerable
  • Changing of the Monetary Policy Guard

Chief Currency Strategist John Kicklighter expects monetary policy will be an important guide for Forex market trends through 2014. John expects USDCHF will exploit both the SNB’s efforts to keep a cap on the Swiss franc as well as the currency’s relationship to the Euro – whose central bank is taking a decidedly divergent path from the Fed’s recent Taper. Though comprised of two carry currencies, AUDNZD’s rate outlook finds expectations at an extreme just as the pair reaches a multi-decade range floor.
  • Lots of Room in Historical Ranges

According to Sr. Technical Strategist Jamie Saettele, the Australian Dollar began to break down in 2013. Setups in EURNZD and USDCAD indicate that the New Zealand and Canadian Dollars could follow in 2014. Moreover, the AUDNZD rate is nearing the bottom of the range that has held since 1979.
  • Inching Towards a Minsky Moment?

Senior Markets Strategist Kristian Kerr believes 2014 will be much different than 2013. With complacency towards financial markets near historical extremes, conditions are ripe for a sharp increase in volatility. He expects such an environment to favor the USD generally, but especially so against portfolio dependent Asian emerging market currencies.

Multiple trend continuation plays from 2013
  • Japanese Yen Remains Top Trade

Quantitative Strategist David Rodriguez saw the Japanese Yen was without question one of the best trade of the year in 2013, and he had the fortune to make it his focus from very early on. Why might it continue to make sense to sell the Japanese Yen? Simply put: currency wars.
  • Breakouts Supported by Diverging Monetary Policy Outlooks in Focus

Currency Strategist Michael Boutros anticipates further appreciation in the Sterling against the Japanese yen and the Canadian dollar as the UK recovery continues to gather steam. As the BoE looks to begin normalizing monetary policy, the diverging outlooks in central bank policy is likely to keep the pound well supported heading into 2014.
  • Sticking With Long-Term Trends In 2013

Keeping with the 2013 forecast , Currency Analyst David Song anticipates the bearish trend for the EURGBP and the AUDNZD to continue in 2014 amid the deviation in the policy outlook. It looks as though it will be a race between the Bank of England (BoE) and the Reserve Bank of New Zealand (RBNZ) as to who will be the first to start normalizing monetary policy, while the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) may have little choice but to further embark on their easing cycle amid the growing threat for deflation.

To read the full report visit: Top Trading Opportunities for 2014.

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About DailyFX

DailyFX, the free news and research website of the leading forex and CFD broker FXCM, delivers up-to-date analysis of the fundamental and technical influences driving the currency and commodity markets. DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of economic and political developments. Additional features of DailyFX include its extensive economic calendar; a complete release schedule of news events coming out of the G-10 countries, with filter capabilities to rank each by their importance and impact on specific currencies. DailyFX serves as a portal to a vibrant online forum in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs, the DailyFX Forum has established a reputation as being a place where real traders go to talk seriously about trading.

About FXCM Inc.

FXCM Inc (NYSE:FXCM) is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers world-wide.

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