- THE FIRST SHOT – “THE SOAPBOX”:
Equity traders were certainly on Prozac last week as the indices around the world leaped up like salmon out of a B.C. river then plummeted like a lead balloon only to come back and then reverse again. The intraday moves gave traders a wild ride in the office each day, I am probably not far off the truth when I say they were happy to have a shortened week due to the Easter holidays.
I suppose we should expect this sort of volatility in equities. The way that the DOW rose to 24,000 this year was crazy. So, expect the markets to behave in a crazy fashion when moving lower, or attempting to move lower! Do not forget most traders on Wall Street these days only know the “BUY THE DIP” approach to trading!
We had a month and quarter end last week, so I suppose we can apportion blame for some of the volatility to end of quarter window dressing.... maybe not!
In Forex, it was not as wild, but range limits were tested in quite a few pairs. I am not expecting these to be broken with the limited trading we have over the Easter weekend. In fact, I do not expect a “FULL” return to normal liquidity until the week commencing 9thApril 2018, as many traders in Europe extend the Easter break.
There was not a huge amount of FX data on the economic calendar last week and to be honest I thought we drifted around in ranges. It was a week that will be very quickly forgotten in my opinion. TRUMP was quiet, TRADE WARS news was relatively low key and even BREXIT news was quiet. Last week on the 29thMarch officially marked the “one year to go” before the official BREXIT date on 29thMarch 2019 at 2300 CET. I have no doubt countdown clocks will start to appear throughout the UK!
Politically, LITTLE ROCKET MAN went to Beijing to meet President Xi Jinping. My take on this is that President Xi is probably pissed off that he was NOT invited to the talks due April/May between Kim Jong Un and TRUMP. I suspect ROCKET MAN was summoned to CHINA.
Whilst these leaders were meeting, moves were also a foot for leaders of NORTH and SOUTH KOREA to meet for talks. If that wasn’t enough, party guest 2018... Kim Jong is being lined up for meetings with Japanese leaders as well.
If TRUMP does manage to pull these objectives together and have a working denuclearization zone on the Korean peninsula, make NO MISTAKE this will be the greatest achievement of any U.S. President going back as far as the Kennedy’s with the Cuban Missile crisis.
If in the same period TRUMP gets “Intellectual Property” rules sorted with CHINA and a greater equilibrium in trade agreements, it will be achievements on a scale that no politician has ever been able to attain.
If TRUMP pulls these deals together I expect mass resignations from CNN based on public credibility. From time to time over the past two years or so, I have been listening to drivel, in fact on a couple of occasions I had thought that I pre-selected the Comedy Channel on my TV remote!
Let me get back to reality away from the hypothetical....
The revolving door at the entrance to the White House continues to spin. The latest to go was David Shulkin the Veterans affairs Secretary, removed because he was not moving fast enough to deal with the departments backlog of claims.
He is replaced by Ronny Jackson, who was basically TRUMP’s physician. TRUMP allegedly appointed him because of the way he dealt with the media over his physical examination.
Now this makes me wonder if the guy that has held TRUMP’s scrotum for his Presidential medical gets such a high-profile role in the government, what role in government is STORMY DANIELS going to get, I would say she held a damn sight more than that!
With regards to Forex...
It was a strange week, we traded ranges and the recent JPY strength was placed on hold as JPY pairs retreated. I think that this consolidation is quite normal given all the news that the markets are trying to digest. Plus, the biggest news of all is that we have a two-way market at the moment. RISK OFF is back in vogue and Wall Street does NOT like RISK OFF as it is more complicated.
To further emphasize the “rangey” marketplace conditions in FX, PREMIUM subscribers will note in section 4.4.2. that the SENTIMENT chart based around the currency pairs that I measure is not that much different from last week’s chart. I have pulled back on trades as I am waiting for a catalyst. I only have 1 x LIMIT ORDER in place and less live trades than usual.
From reading and listening to market analysts on TV, it sounds like the markets do not believe the FED vis-à-vis 3 rate hikes in 2018, never mind 4 rate hikes. The ECB are basically projecting market accommodation to infinity, they are so reluctant not to give a fraction of data regarding forward guidance of any meaningful substance, traders do NOT know what to do with the EUR.
Therefore, it stands to reason that with the most liquid pair in the FX market basically remaining in a very tight range, and that, most moves are triggered from how this pair reacts, it makes perfect sense to me why we have the current performance in FX. We are trapped in the EUR/USD from 1.2092 to 1.2560 range. Within the previous range we compress to a tighter range of 1.2240 to 1.2475.
Personally, I have taken a different overview. I blame the JPY. I think that a huge amount of month and Q1 end squaring and window dressing has taken place and this has mainly been seen through the JPY. Combine the RISK ON / RISK OFF element of this pair plus the crazy equity swings and U.S. 10 YR yield retreat lower. It’s always cool to blame something or someone, ask a politician...
Basically, we need a break out and it’s not that easy given we are news driven via geopolitical factors rather than economic data. This creates volatility but in FX not sustained moves.
Moving on to factors more easily achieved...
Big news for me and some updates and changes have happened already, my subscription option called the PREMIUM SERVICE is no more. It is now called WEEKLY FX PREMIUM.
From now and over the next 5/6 weeks there will be name changes taking place on Social Networks and my website will be having a long overdue facelift. I have done many of the easier tasks already, the heavy lifting as they say is well beyond my pay scale.
- THIS WEEKS IMPORTANT TRADE INFORMATION:
2.1. ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
2.2. GEOPOLITICAL EVENTS:
2.3. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
2.4. USD OVERVIEW – MY THOUGHTS:
Nothing much has changed from last week. We remain in the TRUMP downtrend and remain range bound as seen on the attached chart.
Longer timed charts show “BEAR FLAG” formations with measured moves as low as 82.00.
Initially, the recent lows of 88.20 need to be tested first and obviously USD bears have this level firmly set in their sights.
The BULLS need to take out 90.43 in my opinion as absolute minimum to get me thinking that the “KING $ is back”.
2.5. USD TRADING CHARTS:
The Daily chart below highlights the trading range that I believe we are sitting in.
We have two ranges: MAROON Lines 1.2090 to 1.2550 and the BLACK Lines signify a range within a range at 1.2240 to 1.2480.
This pair is waiting for a bolt, a catalyst to move it one way or the other.
Trend lines galore on this chart. Overhead resistance is at 1.4240. There are lots of buyers ready to cap moves higher here. It will take an excellent piece of BREXIT data to thrust through that level.
We are currently stopped at 1.4000, obviously a huge psychological level and a confluence of trend lines as well as the 50% Fibonacci level of the recent low to high move.
If we break lower I expect buyers before 1.3950.
We stopped the move lower at 0.7640 and spiked nicely back to 0.7700. On the 60M chart there was nice BULL FLAG that played out last Thursday.
I believe that there is a good possibility as long as TRADE WAR concerns are parked that we could see a recovery move back to test the trend line around 0.7780. Time will tell.
Should TRADE WAR Concerns rise again as far as I am concerned a move lower beyond the support trend line to 0.7500 is a definite possibility.
Have we had a false breakdown?
From the chart below, you can see the move lower through 0.7176 on FOMC day, then we have seen a swift move higher. Am I bullish? No, I believe that we are in a range, which is clearly defined on the chart of 0.7176 to 0.7350.
Quite a few lines and levels on the chart below.
- The range PURPLE lines 1.2860 to 1.2940.
- Trend line MAROON resistance at 1.2910. This was a big resistance level a while back that held up several upside moves.
- 3000 BLACK line... my preferred entry to go short.
What does it all mean? From my perspective, it’s either the range limits to short from or if we are very lucky around the 1.3000 level.
One of my ELLIOT WAVE buddies is looking for a move as high as the 2016 trend line around 1.3150. I thought I was ambitious!
As you can see on the Monthly chart below, the triangle pattern is “RIPE” for a breakout. My thought process is a long side breakout towards parity once again.
There is a range in play, which I have been following of late which is from 0.9190 to 0.9850. I am a little reluctant to aggressively trade the CHF given its flight to safety and neutrality attraction.
We are tightening in the triangle.... something is going to give soon.
We are in the throws, in my opinion of breaking down towards 102.00.
However, we have spiked to trend line resistance around 107.00. A short from a little higher would offer greater value, circa. 108.00 would be great. Basically, a re-test of the underside of the 2012 trend line.
The JPY is very targeted currency at the moment as Bond Yields, RISK and TRADE WARS all play directly into how the JPY is traded.
- THE WEEKLY FX PREMIUM TRADING SUMMARY:
3.1. WEEKLY FX PREMIUM PERFORMANCE YEAR TO DATE:
(Incorporating the last 5 WEEKLY FX PREMIUM TRADES)
You can get on board and join from as little as CAD$10 for 10 days and then CAD$150.00 per month, currency conversions for CAD$150 is roughly as follows: -
- GBP £90 per month
- EUR €100 per month
- USD $120 per month
- JPY 12,700 per month
- AUD $150 per month
This represents a great value way to subscribe…
Go to my website www.weeklyfxdrivethru.comfor more details under the TAB – “SUBSCRIBE HERE”.
- WEEKLY FX PREMIUM SUBSCRIBERS:
(This section is for WEEKLY FX PREMIUM ONLY)
4.1. TRADING REVIEW:
4.2. OPEN TRADES... HOW I WILL TRADE THIS WEEK:
4.3. A LOOK AT CROSS-RATES & EMERGING MARKETS PAIRS:
4.3.1. CROSS RATES:
4.3.2. EMERGING MARKETS:
4.4. SENTIMENT,FUNDAMENTAL & MACRO THOUGHTS:
4.4.1. OVERVIEW THOUGHTS (MY MACRO PLAN & IDEAS):
4.4.2. THE MARKET SENTIMENT CHART:
4.5. CURRENT LIVE TRADES & LIMIT ORDERS:
4.5.1. CURRENT LIVE TRADES:
4.5.2. CURRENT LIMIT ORDER TRADES:
4.6. FX BROKER NEWS and MARKET FEEDBACK:
- THE FINAL SHOT:
Nothing more to add here, I have said enough except,
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
The Pip Accumulator
BLOG VERSION: #276 FREE NEWSLETTER
DATE: 31st March 2018