Whilst I enjoyed my summer break, and I did get away for a week to Seattle, it was not as long a break as I thought it would be. The main reason for my shortened break was DONALD TRUMP. He kept the volatility high with all the talk over the CHINA / U.S. trade deal and this enabled me to turn in my best ever August pip performance since starting my paid subscription service of net + 3,360 pips.
I am of course, despite a shortened break, really happy, and above all extremely grateful.
Whilst in Seattle, I attended a Personal Development conference. Trading Psychology is huge in my eyes and areas of Personal Development overlap with emotion in trading so much and in so many ways that to work on yourself through Personal Development, in my opinion, gives you a definite edge. I have studied and taken courses, which are life changing, and, have helped me so much with the emotion in trading, they are just fantastic. Being surrounded by so many people with positive mindsets is very inspiring and if you want to invest in yourself moving forward, this is highly recommended.
However, because of the shortened break, all the little projects that I had planned were re-aligned and many, if not most have been put back in the calendar. I had one specific week scheduled to do lots of little fixes and re-branding but, that week was dominated by TRUMP tweets, need I say more. So many of the changes that I was hoping to launch, and share are on hold for now.
I am however making some subtle changes to the blog format, which you may note.
1. “MY VIEW” or “MY RANT”
THE GBP FUTURE IS STILL UNCERTAIN (GAMES ARE BEING PLAYED):
So much can be written here, and my fear is that by the time the blog is published, potentially what I have written could be out of date as events are truly fast moving.
The timeline last week was as spectacular as it was sad. Exchanges in the House of Commons whilst passionate and full of emotion, were at times over the edge vis-à-vis what should be deemed acceptable. John Bercow the speaker let so much through early on he could hardly try and pull matters back in line towards the end of sessions. The language exchanges were full of hatred very visible in the eyes and one could noticeably hear it.
The simple fact is that there is deadlock in the UK Parliament.
Let me be clear; everything that has gone on in the House of Commons last week, probably over this weekend and no doubt in the coming week are just games.
Party Political games, nothing else.... let me summarise with brevity
- The UK voters want BREXIT
- The politicians want REMAIN
- That fact has never changed since 2016.
- This gives a political deadlock - nothing can be achieved.
- To have a second referendum “a peoples vote” achieves nothing, as whatever the result is BREXIT or REMAIN the same politicians are in situ in Westminster and the same issues they have would not have changed.
- To quote TRUMP a “DRAIN THE SWAMP” event needs to take place.
- Hopefully, those current sitting MP’s who did NOT carry out the wishes of their constituents will be de-selected and removed if a General Election takes place.
The opposition parties together have emasculated the Johnson government by stopping a HARD “NO DEAL” BREXIT. Combined, the opposition parties now dictate the paper flow through the commons. The immediate, so called RISK, has been removed and now all the attention is focused on Monday this week.
This Monday, Johnson will request another snap General Election and under UK fixed term parliament rules he needs a 66% vote in favour. It failed once because the opposition parties want the bill in the course of transmission through the House of Lords to return to the commons, take its final reading and then given royal ascent. At that stage, it becomes law and Johnson would then not be able to highjack proceedings and set an election date pre-October 31st, get a victory and exit the EU on 31stOctober with a “NO DEAL”.
If the election takes place after October 31st2019, it is assumed that the next EU exit date would be January 31stor February 28th2020.
It is expected there will be an election in November. How we get there has options, House of Commons vote, Boris Johnson Resignation or No-Confidence vote.
Basically, we have party politics in play that just delays matters. It doesn’t actually solve anything, if at a general election Boris Johnson stands as Tory leader and wins with an absolute majority then its game on again with regards to HARD BREXIT as a possibility.
As for any document that is made law through the parliamentary procedures, with an absolute majority Johnson will NOT require assistance to repeal whatever has been passed.
This is all a game.... nothing else.
A “NO DEAL” BREXIT can still happen just at a later date.
On the positive side for the UK a parliament 2.0 following an election should at least given all the shenanigans since 2016 accurately reflect the views of its constituents, as opposed to the current batch who consider themselves “Lords of the Manor” voting against the wishes of the people they allegedly represent.
When an election takes place, here is what I see as the possible outcomes: -
- CONSERVATIVES WIN with outright majority: -
A HARD BREXIT at the end of January or February becomes the new RISK date unless a deal is sought in the interim.
GBP/USD possibly 1.1000 – 1.1500.
If a deal is done with the EU.
GBP will rally to 1.4500 or above inside 3-6 months
- CONSERVATIVES WIN but without majority (Hung Parliament): -
HARD BREXIT RISK reduced back at square one again and would probably be blocked again.
GBP/USD will rally if exit date extended but it will be “choppy”, and moves will be related to news flows.
- LABOUR achieves the greatest number of seats but it is a hung parliament. A coalition is formed with SNP and possibly the Liberal Democrats.
HARD BREXIT removed.
POSSIBLY BREXIT cancelled and delayed substantially, maybe another referendum.
GBP/USD would rally as long as the Corbyn economic policies are filtered.
There are numerous scenarios that can play out BUT it looks like despite it all, given early outcome polls the UK could not stomach a Corbyn led government in any shape or form and therefore the Conservatives may still be victorious.
As mentioned, the RISKS of a “NO DEAL” BREXIT would still remain and as such, the GBP future remains uncertain until uncertainty is removed.
I am still trading the GBP mostly via cross-rate pairs. I have had a specific TRADE PLAN within my overall TRADE PLAN in place for over a year on how I am trading the BREXIT RELATED trades.
Not my usual approach to be honest. I fell into this trade approach and adapted it rather than coming across a grand design. It has however been quite effective and although some trades have taken longer than anticipated to complete, carry costs are minimal when you compare GBP/AUD and GBP/NZD on one side to the EUR/GBP and GBP/CHF, which are my main traded pairs.
My exposure over the past few weeks has reduced, and I am keeping my RISK levels well under control as we enter this period of uncertainty and increased volatility.
2. FX - FORWARDS, BACKWARDS & SIDEWAYS:
2.1. THIS WEEK’S ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
2.2. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
2.3. 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.
2.4. USD MAJORS - TRADING CHARTS and MY THOUGHTS:
As you can see on the weekly chart below, we have a descending wedge pattern. These patterns usually create a powerful reversal move.
1.1240 is a key level for me. If we breakthrough that level, we should squeeze higher.
We have the ECB this week and Draghi is expected (although he has opposition from inside the ECB council) to throw the kitchen sink of support at the EUR.
The spike higher is NOT a certainty.
The blue dotted line is what I think could happen. As you can see, I am predicting a lower EUR/USD in the medium term.
I am still targeting the WEEKLY GAP FILL at 1.0787 as my target in the longer-term. I will be looking going forward to re-short this pair with this objective in mind. But, its not on my mind for now.
The daily chart below shows a trend line breakout.
I have covered my thoughts with regards to this pair earlier in the blog. As we enter another uncertain time vis-à-vis cable, I am somewhat skeptical about how far a breakout move will spike.
We had a false breakdown below 1.2000 last week so this move higher is expected, for me, the question is when will it run out of legs? Obviously, 1.2360 is a big number to pass (recent resistance).
We are in breakout mode.
I am not so sure we will extend too far given U.S. / CHINA trade uncertainties. The 61.8% Fibonacci retracement level at 0.6926 from my perspective would be a nice place to look for a reversal move.
A descending wedge reversal mover is in play and Friday’s candle from last week looks really strong.
The 0.6500 level has a lot of previous horizontal support and this may be difficult to overcome, but, looking at the candles pattern it does look like it could be passed by.
Very similar to the AUD/USD, I think that any moves higher, strength in the NZD will be limited until the U.S. / CHINA trade deal is resolved.
I still hold a CORE SHORT position.
Last Friday’s jobs data from Canada was a blowout number and should add weight to CAD strength over the coming few sessions.
As you can see from the weekly chart below, I have identified 1.3015 as a key support level moving forward. I do believe that this level could be broken in the medium term especially when the USMCA trade deal is finally ratified by US lawmakers.
If my resistance trend line is drawn correctly, we are struggling to move higher. I have really not played this pair much this year so far.
I have GBP/CHF trades that are producing pips, but I tried a CAD/CHF long trade on a potential breakout move and I was taken to the woodshed.
A couple of times, I mentioned to subscribers that 0.9720 was the level to enter long... I called it twice but never traded it... argh!!
One of my Hong Kong groups to this day takes great delight in the fact they traded my second call for almost 200 pips!
The 14 DAY SMA is c.0.9840 maybe that offers support, but again I am looking to 0.9720 as my favoured area to look to enter long if the current pullback persists and gathers momentum.
I maintain a CORE SHORT position. Although at the moment I am waiting for limited orders that are strategically positioned to trigger.
Long-term, I am still bearish this pair and my targets are between 100.00 and 102.00.
As you can from the chart below the down sloping 2015 multi-year trend line has basically acted well as support from recent downside moves. We have seen a nice bounce off spike lows at 104.60. I see this move as temporary and I hope to be with trades moving short again in the very near future.
3. THE WEEKLY FX PREMIUM TRADING SUMMARY:
September2019 so far: +440 net profitable pips.
2019 year to date: +13,436 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.
FINALLY: I have just recently launched CORE POSITION trades. These segregate my longer-term trades into a category that may appeal to part-time traders and those who cannot access to their trading screens more than two or three times a day.
This year I am now operating within my TRADE PLAN three categories of longer-term position trades: -
- CORE POSITION TRADES*
- NON-BREXIT POSITION TRADES*
- BREXIT RELATED TRADES*
*All categories have specific goals and objectives and vary on position sizes, RISK and RISK TOLERANCE.
4. WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
4.1: MY TRADING REVIEW & GENERAL THOUGHTS ON THE FX MARKET:
4.2: LOOKING AHEAD – TRADING THOUGHTS FOR THE COMING WEEK:
4.3: POSITION TRADES (NON-BREXIT):
4.4: POSITION TRADES (BREXIT RELATED):
4.5: EXISTING CORE POSITIONS – UP TO DATE POSITIONS:
4.6: POTENTIAL CORE POSITIONS:
5. 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: #334 FREE NEWSLETTER
DATE: 8thSeptember 2019