- THE FIRST SHOT – “THE SOAPBOX”:
Over the past 3 –4 months, I have been playing with the structure of this blog trying to achieve a balance between what is “FREE FOR ALL” versus what stays behind “CLOSED DOORS” for my PREMIUM SERVICE subscribers. I think that after input from a variety of sources I may finally be there with the format that works and covers all objectives.
What a week that was....
I wrote last in the blog about TRUMP being the modern-day ELLIOT CARVER, and whilst the post was a tongue in cheek observation of TRUMPS’s influence, I am starting to think that he is actually dominating the world’s news far more than I thought even 7 days ago!
For the love of God, who is going to win the contract for installing revolving doors at the White House entrance? Because, he needs them installed.
I approach this not from the point that people are moved on, that happens, it’s the quantity and the TRUMP comments that follow each exit makes him sound like he just wants to be surrounded by “YES” men. TRUMP is obviously a massive micro meddler and control freak. If you recall during his election campaign he often said that he alone would fix things, it would be just him. He was often pulled up on these statements and challenged and the questions just moved on to another subject. It does appear it’s his way or the highway at the White House. Despite how big an ego TRUMP has, he cannot manage the world.
This is a massive failing, especially with roles that extend into working with different countries like the Secretary of State. How on earth are people expected to develop relationships across countries and cultures if they are not given any longevity? It appears the only thing that TRUMP wants is 100% “YES” people. This is a really bad policy to run with and over time the U.S. will suffer. As far as I am aware, TRUMP cannot cast a net in a river to feed 5,000 people, nor can he turn water into wine.
With all of that said... it’s Tillerson out, Kudlow in and McMaster ordering boxes to pack up his personal effects. The TRUMP presidency is NOT going to change, the markets really don't care but I feel that eventually it will all catch up one way or another.
The EUROZONE, mainly Barnier and Junker are riding very close to the edge, pushing the extremes to the UK government over BREXIT and how the EU / UK relationship would look from an EU perspective. Whilst, UK Prime Minister’s Theresa May’s recent speech was to outline the vision that the UK government had of the relationship between the EU and UK post BREXIT, it has been poo-poo’d by both Barnier and Junker.
I would think there will be a number of hardline BREXIT MP’s putting two fingers into the air saying basically “f*ck them”, lets walk away pay nothing and let’s see how they (the EU) get on without a huge trade partner. I would say emergency trade agreements in lines of the existing EU deal, but with a new “header” are printed up ready to be signed and implemented, bypassing the EUROZONE.
We must remember the base makeup of the EU. The EU is largely full of its own self-importance with non-elected bureaucrats based in Brussels, who are basically pen pushers without any big picture vision. You just have to look at the response to the TRUMP tariffs to see how they miss the point and focus on the wrong battle. Car tariffs are a great example, basically EU cars into the U.S. rate = 2.5%. U.S. cars into the EU = 10%. Whether you like TRUMP or not, this is NOT a level playing field.
BREXIT was overshadowed a little by the alleged Russian chemical agent attack on UK soil. This story will gather a pace as time moves forward as France, Germany and the U.S. now support the UK in their political moves against Russia.
Back to FX...
Trading this past week has been a nightmare for myself. I have given back some pips, although I have not traded very actively at all. The markets have mainly been slow and painful in tight ranges for most of last week as the FX markets began to consolidate ahead of the FOMC this week. We have seen the odd break here and there but to be honest most of the time we have remained range bound.
One important piece to note however is that the JPY has strengthen this week whilst the rest really remained range bound. I can only think that this is a safe haven play with all the geopolitical events hanging over the markets at the moment.
In addition, one can see that RISK OFF is creeping back into the markets. Commodity currencies are weakening, and the commodity cross rates are now moving and gathering a pace after having sold off last week.
To place matters into context, with regards to my trading performance, I have had such a good start to 2018, I should NOT complain about one poor week in isolation.
- THIS WEEKS TRADING INFORMATION:
2.1. ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
2.2. GEOPOLOTICAL EVENTS:
2.3. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
2.4. USD OVERVIEW – MY THOUGHTS:
The DXY as you can see from the chart below is in a downtrend. Recently, in fact, the past few days in the run up to this weeks FED meeting, the USD has come to life.
My thoughts are contained on the chart below>
Basically, a rate hike should give us a spike higher towards trend line resistance, maybe the 78.6% Fibonacci retracement and previous support level that should act as resistance.
I expect around this level to contain prices and the DXY then resume its downside move to re-test 88.00 again and, in my opinion, a continued move lower to 80.00.
2.5. USD TRADING CHARTS:
The Monthly chart below shows this pair moving lower towards some key support areas. The 1.2090 area is what I consider the break out area that forced the last move higher. Ahead of that there is great interest around the 1.2150-60 area.
As we approach the FOMC with the 95% chance of an interest rate increase in the FED Funds rate on the cards, markets may be bringing the pair into the middle of the recent trading range of 1.2100 to 1.2550.
Frm the Daily chart below it is clear to see that 1.4000 is a stiff resistance level. On several occasions it would be fair to say that sellers have stepped in aggressively as soon as the level comes into view.
With the FOMC this week, it looks like a buying opportunity will be provided as we pullback into Jerome Powell’s press conference and the economic dot plots!
One would have to say that 1.3800 looks an easy target for bears.
The China Tariff and duty trade is in play here. As soon as someone mentions issues with China as a trader you should think AUD.
The AUD is moving lower with uncertainty added to the already stronger USD overall move.
The Weekly chart below shows support at the trend line around 0.7600. The Weekly candle on the chart looks VERY bearish.
If the China trade gathers momentum, this pair could re-test lows around 0.7200 without any problem at all in my opinion.
From the Daily chart below, it is clear that resistance around 0.7350 is quite stiff. We are now moving lower and my “DOUBLE TOP” pattern measured move will soon come into play.
I am bearish the Kiwi dollar and have been for over a year now. I still see the John Key, ex. Prime Minister target low at 0.6500 a real target once again.
This pair has had an explosive move higher on the back of BOC Governor Stephen Poloz, dovish comments, the NAFTA agreement issues and TRUMP comments contradicting those of Canadian Prime Minister Justin Trudeau.
It looks like 1.3200 move could be on the cards, especially if there is a HAWKISH USD response to Jerome Powell this week.
On the attached Weekly chart below you can see that the 2015 Trend line resistance comes into play just below 1.3200. I would expect prices to hold here, if they don't, look out above! Should prices hold, it could be a great spot to enter.
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.
As PREMIUM SERVICE subscribers are aware, I am long GBP/CHF and have the EUR/CHF close by.
The triangle breakdown measured move play is still valid. This pair has been highly responsive of late with flight to safety also playing a part in my opinion.
I expect a spike following the FOMC, which should be viewed as a selling opportunity.
- THE PREMIUM SERVICE TRADING SUMMARY:
3.1. PREMIUM SERVICE PERFORMANCE YEAR TO DATE:
(Incorporating the last 5 PREMIUM SERVICE 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.com for more details under the TAB – “SUBSCRIBE HERE”.
- PREMIUM SERVICE SUBSCRIBERS:
(This section is for PREMIUM SUBSCRIBERS ONLY)
4.1. TRADING REVIEW:
4.2. SENTIMENT, FUNDAMENTAL & MACRO THOUGHTS:
4.2.1. OVERVIEW THOUGHTS (MY MACRO PLAN & IDEAS):
4.2.2. OPEN TRADES...HOW I WILL APPROACH THE MARKET THIS WEEK:
4.3. CURRENT LIVE TRADES & LIMIT ORDERS:
4.3.1. CURRENT LIVE TRADES:
4.3.2. CURRENT LIMIT ORDER TRADES:
4.4. 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: #274 FREE NEWSLETTER
DATE: 17th March 2018