The “Circus” that is also called the UK House of Commons continues to offer a show that you just could not make up. I often watch futuristic blockbuster movies saying to my wife that the creativity and imagination of the writers at times beggar’s belief. The twists and turns in story lines are really constructively etched together to give an ear pricked, eye popping wow factor.
In the UK House of Commons, the twists and turns, are not pre-written, but at the same time they do create a wow factor. I can only imagine that in the majority of UK households the responses are not similar to the blockbuster movies, but more of a “For fecks sake”, “What a load of Boll**ks”, “How much are these tossers being paid?” and “Why the bloody hell are we paying them?”
The shenanigans just gets better and better. The NO DEAL BREXIT is all but removed and Boris Johnsons government has a majority of -44. A General Election... not on your life. The polls are not favouring a Labour victory despite all the rhetoric in Parliament about wanting Johnson out. If the Labour Party voted in favour of a General Election, it would be like turkey’s voting for Christmas.
Boris Johnson is waiting on how long of an extension Brussels will afford the UK once again to get its house in order. France and a couple more countries say 14 days more to get the BREXIT WAB finalized and then the UK can drop out. Other members of the EU27 say 31st January 2020 in line with the Benn act.
Johnson has offered the Labour Party a review of his WAB in return for a December 12th vote as a means of a compromise, but that could only possibly happen once the EU27 extension period is known. Typically, the horse trading that one usually sees in politics is now in place. UK opposition parties are in different positions vis-à-vis an election. Like BREXIT they can all agree on what they don’t want but they cannot agree on what they do want and the timetable that goes with it.
It is just FUBB....
Just to make this nonsense really good, it is widely reported that back-bencher MP’s (the lowest paid in ranking), have since the June 2016 referendum, earned including per diem expenses around GBP500k each. This number must make UK taxpayers proud and satisfied with the way that their elected representatives have conducted themselves in carrying out the wishes of the electorate since the referendum.
Basically, the UK POLITICIANS KEEP THEIR GRAVY TRAIN ROLLIN’
Given that at the current time the FX markets are very range bound and low on volatility, rather than sit staring at flashing lights on screens all day with little being offered to trade unless you scalp trade, what is there to do?
This past week as we are close to the last 60 days of 2019, I turned my attentions last week to start to prepare for 2020. FX PREMIUM subscribers later in this blog are privy to my initial thoughts about next year, albeit I am in the early stages of getting things ready.
As you guys do not have to do that...
Why not demo account a new or revised trade style that you may be able to add to your TRADE PLAN next year? I realise this may be difficult given volatility issues, but if you are already a day trader have a go shorter time frames should a 4-hour range trading or even a lower time frame.
Start working on your TRADE PLAN for 2020. Set out goals and objectives that you want to meet.
Screen time is always valuable to have to gauge price movement with specific pairs but I think it is always beneficial in the medium to longer-terms to look ahead and plan.
FX - FORWARDS, BACKWARDS & SIDEWAYS:
1: - THIS WEEK’S ECONOMIC DATA:
(Courtesy of Forex Factory)
2: - BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
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)
4: - USD MAJORS - TRADING CHARTS and MY THOUGHTS:
The single currency has broken out on the long side and is now out of the BEAR CHANNEL on the chart below.
We are moving towards a large resistance area that includes major confluences of not just a large amount of previous support and resistance levels, but also, the 200 DAY SMA and the 61.8% Fibonacci level which both rest at 1.1210.
You can also see that we have a potential BULL FLAG pattern in place with a measured move potential to 1.1265.
FX moves are slow at the moment, and last Friday the EUR/USD dipped below 1.1100 to the base of the flag. This move does not yet invalidate the FLAG PATTERN, but it will limit the measured move potential.
The FOMC will be a big mover this week and I think that FX moves will be on hold pending the FOMC, it should also be noted we have the U.S. jobs data this week as well.
The FX market has been starved of volatility of late, lets hope that these key events get this pair moving. Once this pair moves it tends to lead the FX market.
What a week in BREXIT. It was on... it was off.
I already wrote enough about BREXIT in the introduction of this week’s blog.
From the DAILY chart below, we have a BULL FLAG pattern with a measured move of just below 1.3600.
The GBP/USD has not sold off as much as maybe one may have feared since the BREXIT breakdown. This pair has had support basically at 1.2800, lows were 1.2780. As a NO DEAL BREXIT fear is being removed cable has buyers on dips.
The range is set in my opinion from 0.6670 to 0.6900.
The 200 DAY SMA is at 0.6960.
The 14 DAY SMA is at 0.6800
The last move upwards basically stopped at the 50% retracement of 0.6880.
The $64,000.00 question is what next?
If TRUMP and CHINA agree the phase one trade deal, do we spike higher, or does the market say like me... “For God’s sake this is NO COMPREHENSIVE deal from the master of the “Art of the deal”. I think the markets view would probably be disappointment, as there will still remain huge uncertainties over the issues that both TRUMP and KUDLOW have repeatedly stated were crucial... no halfway measures have NOT even been touched.
One could argue that we got close enough to the Head and Shoulders measured move at 0.6450 on Tuesday last week and that this pattern is now completed.
In any event, we are moving lower, whether this be on the back of Chinese data or the failings of the phase one U.S. / CHINA trade deal, who knows?
We are moving lower and I see the range being 0.6200 to 0.6450.
It is just not clear what this pair is going to do, we need a catalyst. I was going to fade from a higher level but, I am just not convinced with the price action.
Nothing has really changed in the past week.
I still hold a CORE SHORT position.
We are in week three of a down move and the USD/CAD is now despite a general election result with a hung parliament sub 1.3000.
The BOC meets this week and there is a press conference. I cannot see the BOC cutting rates at the moment, so from my perspective the commentary and questions and answers in the press conference will be important to gauge BOC policy.
1.3014 is a key level for me. The range is 1.3014 to 1.3350.
If the USMCA is passed my thought process is that this should provide additional CAD strength and send this pair lower towards 1.2800 at least.
I am waiting, I am looking to go long in the area of 1.9720. 1.9600 would be even better.
No change from last week.
I hold a CORE SHORT position.
108.50 is a key level and a sort of BULL / BEAR line to consider. Long-term, I am still bearish this pair and my targets are between 100.00 and 102.00.
I am still looking to fade any spikes with more short positions.
5: - THE WEEKLY FX PREMIUM TRADING SUMMARY:
October 2019 so far: +3,145 net profitable pips.
2019 year to date: +16,491 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.com has 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 find 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 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.
6: - WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
6.1: MY TRADING REVIEW & GENERAL THOUGHTS ON THE FX MARKET:
6.2: LOOKING AHEAD – TRADING THOUGHTS FOR THE COMING WEEK:
6.2.1: CORE POSITIONS:
6.2.2: POSITION TRADES (NON-BREXIT):
6.2.3: BREXIT RELATED TRADES:
6.3: SUMMARY / OVERVIEW OF EXISTING CORE POSITIONS:
7: - 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: #341 FREE NEWSLETTER
DATE: 27th October 2019