A slide in emerging forex markets was led by the Argentina's peso and Turkish lira. Global macroeconomic data was mixed, with the euro zone PMI reading for January showing a recovery, while China's GDP fell to a 14-year low of 7.7%. The biggest 1-day fall of Argentina's peso on last Thursday was more than a little co-relation of the day 17 years ago when the Thailand baht was driven into free fall. Yesterday Turkish lira fell to new lows against the US dollar. The sell-off was in financial markets due to Chinese manufacturing fears and slowdown. Last week's surprise decline in the January manufacturing PMI, the official Chinese Manufacturing PMI data for the month of January is scheduled for release on Saturday and will be closely scrutinized to gauge economic health of the World's second largest economy.

Traders eye the Fed meeting on this Wednesday, raising expectations for tapering. Countries like South Africa, Chile, Peru, Indonesia, and Thailand were very sensible to the US tapering. India's economic rebalancing shows the way forward for EMs in crisis. Today, the Reserve bank of India is going to announce its interest rate decision. Argentina currency has been depreciating for the last two years every day. Its 2 years old news. But the pressure on the currency reached a point where they decided to relieve it from restrictions and let it fall and find its own level. It's in a way good news for free markets, get it over with rather than keep the crisis lasting. But that removal had a one day impact that has become news to the World over for what is already a country facing 28% inflation.

USD/JPY

The US dollar index is trading at 80.5 and mixed against a few currencies. For the pair of USD/JPY, we alerted in our previous report dated January 16, 2014. We can witness negative divergence in the chart. In yesterday's trading session the pair hit a low at the level of 101.77, the lowest level since December 2013, taken parallel support of December's low. Oscillators are showing a mixed indication. Due to oversold conditions, a pull back is expected from current levels. Overall, the trend is down. Short-term support is at the level of 101-100.95.

AUD/USD

The Australian dollar (AUD) remains very sensitive to Chinese data, as Australia is the major trading partner of China. AUDUSD fell previous week to its lowest level since July 2010. AUD/USD is trading at the level of 0.8741 in Asia's trading session. In the hourly and daily charts oscillators gave a pullback signal, the price reached the resistance zone. Due to the oversold conditions, the fall was limited. Overall, the trend is down, targets are at 0.8450 and 0.8400.

Support: 0.8732, 0.8729.