My final blog of 2019, an ideal occasion to reflect on the trading year, maybe for some but I think that I will save those thoughts for my December “WEEKLY FX PREMIUM” performance blog, which I will complete and post sometime between Christmas and New Year, when I decide to close out 2019.
Last week was a huge week: -
THE UK GENERAL ELECTION:
The UK Election returned Boris Johnson’s Conservative Party which crushed the Labour Party with a resounding result, and a convincing mandate from the UK electorate, giving him a working majority of 80 seats. The most successful Conservative leader in modern day politics since Margaret Thatcher.
The Withdrawal Agreement should now be thru and signed off by January 31st 2020. At that point we move to the “Future EU Relationship” agreement which has an aggressive sign off date of December 2020. Many think this date is too aggressive, but Johnson now has flexibility in his approach with the EU.
My BREXIT (BRX) trades are now at a minimum. I banked over +2,000 pips and some nice $$$ on results night. I am now trading BRX trades at a minimum pending more details on the Conservative Party on their road map ahead.
My thoughts on cable are pretty much what I wrote about last week in this blog: -
So, what are my thoughts vis-à-vis the election result?
Conservative Party Majority above +25 seats = 1.3350
Conservative Party Majority less than 25 seats = 1.3250
Hung Parliament = 1.2500- 1.2600
Labour Party Majority = 1.1800 -1.2000
Cable pulled back last Friday (the day after the vote). As I wrote last week, I saw the 1.3350 level as the area from which to build from. The pullback was to enable a wash through of the overbought conditions and establish a base. Personally, I am not adding additional BRX positions into the year end, but what happened following the result is in line with my macro thoughts.
On a final thought / view of the UK election. Watching and listening to the Jo Swinson, Liberal Democrat leader who lost her seat to the SNP (Scottish National Party) and many Labour MP’s including leader Jeremy Corbyn. They all made speeches about democracy and how sorry they felt for the UK voters.
These are same people who promoted political polarization, failed to respect a democratic vote, lied (in Corbyn’s case) based upon his 2017 election pledge and Swinson’s case entered the 2019 election with a manifesto pledge of repealing Article 50 of the Lisbon Treaty without a referendum vote. In both examples hardly democracy in action.
It’s more hypocrisy rather than democracy.
In fact, the REMAINERS parties sadly for the UK voters appear to have somewhat united themselves in defeat. So sad self-serving politicians could NOT see the big picture.
When I studied, Government and Politics and the British Constitution all those years ago, the politics of populism was seen a fanatism and polarization was a possible fallout to deal with. Nobody all those years ago told me that a waiver of democracy would also be a consequence.
THE U.S. / CHINA TRADE DEAL:
It’s never straightforward in the U.S.
We witnessed TRUMP step to save U.S. equities last Thursday stating that a CHINA trade deal was done, “CHINA wants a deal and so do we”, although nothing by way of confirmation came out of Beijing. The was a media frenzy as TRUMP took control of the narrative away from the impeachment hearings and voting debates. BLOOMBERG, CNBC and FOX BUSINESS were once again “frothing at the mouth” over leaked details that were denied as being accurate the following day by TRUMP.
TRUMP played the media once again....
- TRUMP had let the FAKE NEWS develop as it suited his purpose vis-à-vis the equity markets.
- Pure SPIN, misleading the markets once again.
Last week I wrote about Mickey Mouse politics from the TRUMP administration here was another example.
On Friday last week, CHINA called a press conference regarding the deal. Announcing an agreement but in line with TRUMP very little details. What we do know is that the December 15th tariffs that were due to be levied by the U.S. are not going to happen. Some of the September 2019 tariffs have been cut to 7.5% from 15%. I have no doubt that the tariff picture will be clarified over the weekend.
Personally, I believe, TRADE WARS are here to stay, and TRUMP can spit out his dummy and re-instate tariffs at the drop of a hat.
I mentioned political polarization earlier when talking about the UK election. From the country that brought the world the Great Depression in the 1930’s and Great Financial Crash of 2008-9, we can also hand the Gold Medal to the U.S. for political polarization. The electoral system in the U.S. with a two-party system encourages stalemate and polarization.
House Democrat Leader, Nancy Pelosi let it slip last week that she had been looking to bring impeachment charges against TRUMP for over two years. Whether you rate TRUMP or not, If this was her focus, rather than to do good for the U.S. people whilst in her political position, you have to question her motivation as a politician. My point is the VAST majority of politicians are self-serving egotistical beings not capable of the greater good as modus operandi.
In 2016, 2017 and 2018 all the talk was about POPULISM.... I think we moved dangerously for democracy’s sake into PURE POLITICAL POLARISATION.
This manifests itself from a trading perspective through manipulation of all markets, which is self-evident in the U.S. via TRUMP and his puppets especially with regards to the CHINA trade deal communications.
Getting off my political soapbox and moving back on track....
As many people had thought, including myself, that the Phase 1 deal would be one to fade, I am a little surprised that we did not move higher before dropping. It looks like an announcement triggered a move with JPY strength across the board.
The FX market is fickle. My usual pairs that I like to track vis-à-vis RISK are EUR/AUD and EUR/NZD. Of late, I like the USD/MXN better it is really sensitive to RISK in the U.S. market. I am currently long this pair; I was expecting to be removing my long trade on the back of the CHINA Press Conference Friday.... how wrong could I have been; as it rallied quite strong!
I continued my attendance of as many webinars as possible to see what bank and institutional analysts, plus major influencers in the FX market are thinking looking towards next year. There are no grand designs vis-à-vis FX for 2020, in fact, it's the same old, same old. Technical traders were STILL trying to suck up the EUR/USD with as much bullish commentary as possible to 1.1400.
Despite all the bullish commentary the EUR/USD cannot get through 1.1180!
The day before the UK election there was talk of traders getting long EUR/GBP. Why would you put that out live in a webinar where less experienced traders are living on “your every word”? The FUNDAMENTALS were for a short trade based on the potential well documented pre-election poll.
I am not saying that I am perfect but there are responsibilities and caveats are NOT obvious if I place myself in the shoes of a newbie trader. I am NOT saying that I am perfect this is just an observation.
Moving on again...
My subscriber promotion “TAG ON” is in play.
Subscribing now on an annual basis will have you set up through to the end of 2020. The remainder of this year can be used to get familiar with the system and have you ready to hit the ground running in 2020: -
- My goal this year on net new pips was +10,000 net positive pips.
- I have so far achieved +20,181 net positive pips.
- Next year there is an aggressive +15,200 pips target.
Obviously, I am “Over the Moon” with regards to the pip tally for 2019 so far. I am grateful that I was able to capitalize on some great opportunities.
Whilst the blog posts have ended open trade management carries on through the Christmas and New Year Holiday period. It is always fun working at my screens with less intensity with a Jack Daniels and a mince pie!
More details about my subscription service and my promotion are in section 5 of this blog and they can also be found on my home page at www.weeklyfxdrivethru.com
under the tabs HISTORY / PERFORMANCE and SUBSCRIBE.
Finally in this section...
This is the final “DRIVE THRU” blog of 2019 in this format, there will be an FX PREMIUM December Performance blog that I will post sometime between Christmas and New Year.
Next year the “FREE NEWSLETTER – DRIVE THRU” blog will be more compact, with my FX PREMIUM subscriber version containing greater content albeit also with a revised format and structure. This is scheduled for the weekend around the January 12th, 2020.
Size does matter...
Just a note to let those of you who like to run through my archived blog posts etc. As a result of me adding lots of content on a weekly basis, my website page opening speeds have been suffering and as a result I will be reducing the historic blog post and blog post content on the website to a rolling 12-month history only.
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:
We have had a FALSE BREAKOUT that you can see by way of the RED ELIPSE on the chart below. The 1.1180 level of resistance basically held strong and after so many analysts calling for a breakout to c.1.1400 it’s just NOT happening yet.
We are as I have said many, many times before in a trading range of 1.0960 to 1.1180.
I have annotated the WEEKLY CHART below with a trend line support (BURGUNDY LINE) at 1.1030.
We are running out of large-scale events into the year end, so do NOT expect too much in FX moves. At the moment, we have gotten used to the lack of market volatility and no follow throughs, so we will not be missing much if the tight range bound conditions continue through to the New Year.
Following the UK Election, we saw a move higher in this pair of about c.350 pips. As you can see the move post the exit poll was to the 127.6% Fibonacci extension at 1.3515. Since that move higher, we saw about a 50% pullback of that move on Friday last week, which was to the level I noted in last week’s blog of c.1.3350.
I see this level as a base from which the cable may build from. We have the BOE Monetary Policy Statement this week, so we may see a period of consolidation with the cable, pending commentary from Mark Carney the BOE Governor.
14 DAY SMA = 1.3060
200 DAY SMA = 1.2690
The breakout level of 1.3250 will act a strong support in my opinion and there is a BULL FLAG measured move top 1.3800 in place.
I had a short trade in this pair last week. My stop loss was at 0.6940. I was top ticked for my stop to be taken. Since then it has pulled back and sits much lower despite the trade deal announcement.
The range is set in my opinion from 0.6670 to 0.6940.
The 200 DAY SMA is at 0.6910.
The 14 DAY SMA is at 0.6825.
We have a very long RED (BLACK) candle in play on the chart below. 0.6865 offers trend line support from the trend line that had previously contained prices.
The inverted Head and Shoulders pattern shown on the DAILY chart below played out.
We now have a very long wick shooting star candle in play on the chart below. This is bearish. It is also surprising given the trade deal announcement.
At the moment, I am long AUD/NZD and EUR/NZD with CORE POSITION trades, and I have GBP/NZD long BREXIT trades as well so my thoughts are with this move lower with the NZD/USD... long may it continue!
14 DAY SMA = 0.6515
200 DAY SMA = 0.6530
The above moving averages could have a say in whether this pair moves a lot lower or not.
I am still short, still holding two small short trades and I am being patient. We are still in the trading range of 1.3014 to 1.3350.
Realistically, I would like to see a drop lower beyond 1.3150, which seems to be holding any downside move up at the moment.
This pair has started to move lower. I am still of the mind that entering long from lower levels around 0.9650 thru 0.9720.
Have we seen the spike higher on the U.S. / CHINA trade deal?
Was 109.70 the level?
I am bearish this pair so for me to enter short I would like to sell into strength next week to re-establish my short. As you can see from the chart below, we still have an inverted Head and Shoulders pattern in play that would not be invalidated until we break lower through 106.90.
That level is quite some way away from current levels so to trade this pair one needs not just strong FUNDAMENTALS but also a strong trading conviction with an extended time horizon.... plus, potentially plenty of patience!
5: - THE WEEKLY FX PREMIUM TRADING SUMMARY:
December 2019 so far: +2,940 net profitable pips.
2019 year to date: +20,181 net profitable pips.
2019 Annual pip target: +10,000 net profitable pips.
Performance: = 201%
The WEEKLY FX PREMIUM is my subscriber 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 2020 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.
Coming next year in 2020, there will be a revision of my TRADE STYLES, but I will still be retaining my macro views as a longer-term POSITION STYLE trader.
My objective on “Net Profitable Pips” in 2020 = 15,200 pips. Full details of my plans, projections will be in FX PREMIUM subscriber welcome packs.
6: - WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
(Only subscribers to THE WEEKLY FX PREMIUM subscription service have access to the content in this area)
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.
Finally, Be GRATEFUL for your wins and COUNT THEM. Be positive, keep a POSITIVE MINDSET in play at all times, regardless of the market conditions.
A definite final word or two...
Whether you are a FREE NEWSLETTER or a WEEKLY FX PREMIUM subscriber, or you pick up this blog through the other posting options I use, I want to thank you for your support in 2019 and wish you are your families a great Christmas and a “Pip” prosperous and healthy New Year in 2020.
The Pip Accumulator
BLOG VERSION: #328 FREE NEWSLETTER
DATE: 15th December 2019