As weeks go, last week was probably one of the quietest from my involvement with market since I started trading in the FX market. The quick and easy measurement is the fact that I only added eight new trade set ups and three of those were added last Friday!
The market, as I have stated over and over again this year so far is very hard to trade as a SWING to POSITION trader, regardless of whether your longer-term fundamental macro views are accurate or not. There is no real market movement. The FX market remains trapped in tight ranges.
The “BIG HOPE” to get FX moving was the potential opportunity for a FED interest rate cut at this weeks FOMC meeting. I think that “HOPE” has gone based on the fact that last Friday’s U.S. Retail Sales number was basically in line and previous data releases were upgraded.
In my opinion, if the FED cuts, as far as I am concerned, that shows that Powell and co are in the pockets of TRUMP. FOMC voter, James Bullard caught a lot of attention last week when he broke ranks with other voting members by saying maybe the time is right for an interest rate cut. What we must remember is that Bullard is a DOVE. As I have stated over and over... “Once a DOVE always a DOVE”
To be a HAWK requires balls, especially with the intense market pressure for cheap money, exacerbated at the moment by TRUMP and co. From a Central Bank perspective FOMC members have to play a pro-active long game, they cannot be reactive. As I see it, as a Central Bank committee, as long as they can show, backed up by economic data, that they are ahead of “the curve” they are in a winning position.
Unfortunately, financial analysts sell their own influences and influencer’s positions. They have NO economic responsibility for a country’s economic performance. Yet, they are wheeled out without comeback on poor guidance by CNBC and BLOOMBERG TV as if they are demi-gods!
We as retail traders have to see through their bias.
Be careful with the FOMC this week, it has all the hallmarks of a volatile news event. The algorithms will be on speed for 2/3 hours!
1. FX - FORWARDS, BACKWARDS & SIDEWAYS:
1.1. THIS WEEK’S ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
1.2. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
1.3. USD INDEX (DXY) OVERVIEW – MY THOUGHTS:
The Daily DXY chart is below and my thoughts, ideas and comments regarding the DXY are contained on the chart.
1.4. USD MAJORS - TRADING CHARTS and MY THOUGHTS:
This pair has had a massive breakout from the descending wedge pattern. Usually these reversal moves are very powerful. In the case of this move it was a bit of a damp squib.
Like a “nutter”, I was caught up in euphoria of the move higher in the EUR and I placed a long trade, despite my FUNDAMENTAL longer term views based on the fact that EUROZONE data is so poor and forward guidance extremely questionable it only has one way to go.... lower!!
I have questioned my sanity. I took a couple of walks on the beach with the dogs last week to seek clarification in the Atlantic Ocean salt sea air.... I am OK.
One should have a short BIAS with this currency pair in my opinion.
My short trade missed triggering by less than one pip on Friday morning last week.... argh!!
From the chart below you can see that the 14 DAY SMA has tried to hold a further fall lower (LIGHT BLUE LINE), which comes in c.1.1240.
In the short to medium term, a test of 1.1200 looks on the cards and subject to the FED statement 1.1100 lows from earlier this year look attractive for USD bulls.
REMEMBER HOWEVER: - There are a huge number of geopolitical factors at play that could affect the way this pair moves.
The Tory leader and future UK Prime Minister (by default) elections are in play. Boris Johnson is way out in the lead after the first round of voting and has over 30% of the share of the vote from the existing “swoop” of Tory MP’s. He is now the 83% favourite to be leader and new Prime Minister of the UK as a result.
Cable is holding up really well, given the additional uncertainty in the markets, the big question is how it would react to a BREXITEER at the helm. We will need to wait and find out .... just a few weeks to wait.
On a side issue, I notice that the EU are looking at a technology solution to the Irish Border issue. Wasn’t this something they said would NOT work? Politicians are just so full of crap and talk bollocks, is it any wonder the world is full of apathetic voters?
Getting back on track...
I see the cable being held range bound for the coming weeks between, 1.2424 and 1.3390. The BURGUNDY RECTANGLE on the chart below.
From last week: - This pair is the “KING” of false breakouts.
I currently hold a SHORT POSITION (POS301), I am not amending my stop loss level, just in case this is the time we see a full-on AUD spike higher.
The break higher did not happen and now we have tested trend line support as you can see from the chart below. My (POS301) trade is in good shape as a result.
I do though however, believe given the CHINA trade deal news and the poor CHINA data and also the AUD (RBA) position, this pair should be at 0.6600 and not at 0.6900.
Huge reversal this week. Just look at those DAILY candles on the chart below. I expect a bounce at some time, which, I will sell into. This should be the classic SELL THE RIP trade this week.
I think we are heading to re-test lows at 0.6480 from May this year. This may be the bounce level and then ultimately a move lower to 0.6000, the low from 2015 would NOT surprise me now.
Holy crap, trading this pair is like playing “snakes and ladders”.
I am short and under-water at the moment. I am looking for much lower levels from a FUNDAMENTAL viewpoint. At the moment I am happy to hold, well as happy as one can be that is!
Initially, I was hoping that the 14 DAY SMA (LIGHT BLUE LINE) on the attached chart will hold up the move higher at 1.1390. It did not and we moved higher and stops above 1.3400 were too juicy on a slow Friday afternoon not to be taken. I now have the opportunity to short more c.1.3400 if I want to.
After the large, TRUMP would say HUGE big RED candle on last week’s WEEKLY CHART this spike higher was NOT on the cards from a technical perspective in my opinion.
I am still waiting for prices to enter my BUY ZONE. Until that happens, I remain sidelined.
This pair is not correlating 100% with its inverse relationship with the EUR/USD/, therefore be careful. The CHF will always react differently when GOLD is volatile, which it has been of late and geopolitical factors, especially the EUROPEAN UNION and EUROZONE will play heavily on any CHF moves.
Around 0.9800 looks a great level to enter long in my opinion.
I am short and holding for a much larger move lower. I am looking for the “Flight to Safety” move to dominate Q2 and Q3 moving forward.
110.00 looks like great resistance and below 108.00 we should see the move lower increase in intensity.
2. THE WEEKLY FX PREMIUM TRADING SUMMARY:
June 2019 so far: +125 net profitable pips.
2019 year to date: +8,031 net profitable pips.
The WEEKLY FX PREMIUM is my subscribed based FX support option, which offers, subscribers’ full access to my suggested trade set-ups and my market commentaries.
If you go to my website you will see more information about the WEEKLY FX PREMIUM, including the “SUBSCRIBE” tab at the top of my welcome page.
My website www.weeklyfxdrivethru.comhas full details of my trade projection for 2019 along with reasons why you should consider joining my other subscribers at the WEEKLY FX PREMIUM. You will this information under the “History and Performance “tab
Plus, my website also contains full details of the subscription options available. You will find this under the “Subscriptions” tab.
3. WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
3.1: TRADING REVIEW:
3.2: LOOKING AHEAD - IDEAS FOR THE COMING WEEK:
3.3: FUNDAMENTAL: THOUGHTS AND VIEWS:
4. 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: #326 MY FREE NEWSLETTER
DATE: 16thJune 2019