Shocks & Surprises Weekly FX Observations

Please note the caveats of previous weeks: no way of forecasting currencies with consistent success has yet been discovered, and this is no exception. All I am trying to do is provide a consistent basis for recognizing the establishment and disruption of current trends. Please do not mistake this for trading advice. . . .

Watch List/New Trends
Euro: Last week's weakness finally looks to signal a change in trend, with the strengthening trend observed since mid-Sept 2012 probably being replaced by weakness. If so, we now have a ceiling of around 1.31.
Turkish Lira:  The currency joined the Watch List last week, and was sufficiently weak to establish a new weakening trend, succeeding the strength seen since mid-Sept 2012. The current ceiling is 1.782 to the dollar.

Strengthening Trend
US Dollar:  One by one, the other major currencies have fallen away, leaving the dollar strengthening against the rest of the world. The strengthening trend which has been in place since early January is still gathering momentum. Against the SDR basket of currencies, it is now at its strongest point since July 2010.
Rmb: No change here - a very gentle strengthening trend is still in place (since early Oct 2012), but is perhaps morphing into stability vs the dollar.

Weakening Trend
Sterling: I thought the weakening, established in mid-January, was possibly over-done last week (it was 3.5 SDs below trend!) with a short-term rebound likely. In the end, there was merely momentary stability, so little reason to believe the underlying weakening trend won't be resumed. The likely ceiling has now fallen to 1.59 to the dollar.
Yen: Still no threat to a strong weakening trend, in place since mid-Dec. The current ceiling of 86.4 continues to descend rapidly.
A$:  The weakening trend established in the first week of February is now obvious: the ceiling is currently still around 0.96.
Gold: On a trend basis, the metal has been weakening since early-Jan, and its ceiling has now come down to 1,678 and falling rapidly.
Commodities: After gapping down in the previous week, there has been no rebound, suggesting that the weakening trend is intensifying. The CRB Index trend ceiling has come down to just below 297.