This week the USD JPY confirmed last week’s closing price reversal bottom with a follow-through rally to the upside. The primary catalyst behind the Dollar/Yen rally was the interest rate differential. Treasury Bond yields rose this past week while Japanese rates held steady. The increased spread helped draw investors into the Dollar.

Weekly December Gold closed higher for the week. Even though the market closed up on Friday, the closing price reversal top on Thursday is still in place, indicating a possible short-term top. While a change in trend is not indicated at this time, the closing price reversal top could be indicating the start of a substantial correction.

The U.S. Dollar finished the week sharply higher after posting gains against all the major currencies. The catalyst behind this week’s strength was the action by the Fed to stabilize its balance sheet by shifting assets from mortgages to long-term debt. This sent a signal to already worried investors that the Fed was making room for the possibility of a prolonged downturn in the U.S. economy.

U.S. equity markets broke sharply late in the trading session following a bearish Durable goods report this morning and a gloomy outlook for the economy according to the Fed’s Beige Book.