Another week completed and we still have a pulse...
I always think, when a blog or any written piece opens with that sort of line it sounds like the writer has struggled with the week and glad it’s all over and he or she wants to open the following week journaling a fresh page.
In my particular example, of that opening statement, as a Forex Trader, I just want a fresh page where there is no more “chop” in the market. As I have written so many times of late, it is simply, in my opinion, not a swing trader market.
Over recent months, one change that I have become increasingly aware of is that how many “FX Traders” are now trading INDICIES and PRECIOUS METALS. It obviously leads to the following question, Has the traditional FX Trader become re-defined? Maybe, those who have changed are no longer FX Traders but should now be rebranded as Intermarket Traders.
Am I a dinosaur, one of a dying breed of traditional FX traders?
Frankly, I couldn’t give a rat’s ass, but it does highlight the difficulties in trading Forex at the moment. Obviously, FX Brokers introduced the options to trade from demand in the market and with the introduction of CRYPTO the trading options and range of products available to trade from a traditional FX Broker are now seriously enhanced from just a couple of years ago.
I would point out though; this is NOT done for the good our health and well-being of traders. It all comes at a cost to the trader via spreads, pricing and rollover costs. Do NOT think it’s a 100% deliverable based on flexibility.
Over recent months in this blog, I have focused on the following: -
- The U.S. Presidential Election.
- The subsequent fall out following the result.
- Choppy range bound FX markets
- Vaccine Rollouts versus Market Fundamentals
- BREXIT deal agreement and the fallout
- BIDENS opportunities and threats
- CHINA playing the TRUMP administration like idiots
Remarkable to me... I have not focused much on the EUROZONE, I have only given it a fleeting comment here and there since last November.
For those of you who love my attacks on the bureaucracy of Brussels, I know with the vaccine rollout in the EUROPEAN UNION being so poor and driven by pen pushers and jotter blotters it was too easy for me to target.
So, I have possible soapbox pieces in the can to pluck when required, if relevant.
Despite the market frustrations earlier last week, Friday saw the commodity currencies break with strength. Both the AUD/USD (+99 pips) and NZD/USD (+75 pips) moved higher, and the USD/CAD (-60 pips) lower. Prices had been contained for quite some time but eventually just like trying to hold a beach ball under water for a long time, the pressure eventually mounts and as it moves up it leaps higher. The only notable lack of correlation was the USD/MXN, my favourite RISK BAROMETER, it stayed well supported, it did not follow USD weakness and sell off. As I have always said “Ta ceann ann i gconai” ...
From a pip gathering perspective last week, I was able to break the +1,000 pip for the month, and month to date THE WEEKLY FX PREMIUM has achieved + 1,188 pips, with the annual total now sitting at + 2,435 pips. I am both happy and grateful.
1. THE SOAPBOX:
INTO THE GREAT WIDE OPEN:
Never in my trading existence have I ever said, “Thank God for the Cable”, usually I am calling cable nothing but swear words, every expletive under the sun. Thankfully before the commodity currencies did their thing on Friday last week, the cable did its thing 24 hours earlier on Thursday.
Breaking higher towards 1.4000 was a big thing, the GBP/USD had been held captive at 1.3950 for a while it was only a matter of time before 1.3950 and then the psychological 1.4000 also broke, which happened last Friday.
Thankfully the cable has broken out. Trading FX was getting boring, annoying, frustrating and it was so bad I nearly found myself preferring to shovel snow than spend time in front of my screens. The Range Bound, Choppy market moves with market teasing at Breakouts and Breakdown levels were just off the wall, testing my patience.
I have added the GBP/USD daily chart below, last weekend in my commentaries during the DRIVE THRU and SUNDAY MORNING ZOOM presentations, I was expressing concerns about a false breakout. As on the 12th February the cable put in quite a reversal candle and my thoughts were that we were heading lower. I got that view completely wrong. I was shutting up shop on all my cable related trades.
Last week’s GBP/USD candles:
- Monday - a bullish reversal.
- Tuesday - a doji candle.
- Wednesday – Almost a Hanging Man but candle was bearish to me.
- Thursday - A “Full-on” bullish candle. Over a +100 positive pip move higher. This was the candle for me that confirmed the break higher and invalidated the Ascending Wedge pattern.
- Friday – Best description would be a nice positive “White Candle” even though its green on my chart! Many may argue its “Spinning Toppish” but for me it's a nice continuation BULLISH candle consistent with a market breakout move.
So, what next....
Below I have added a 240 Minutes (4 hour) chart that I had posted to Twitter on the 16th February 2021.
On this chart you can see a step flag pattern with the final flag measured move being 1.4030. How far did we go on Friday last week? We had highs of 1.4036.
TRADING OPPORTUNITY: As you know FX always tests prices to validate the move so for those of you who missed the move there should be pullback opportunities around the 38.2% retracement level of 1.4004 to perhaps enter long with the trend direction. Placing stops below the 1.3950 previous big resistance level which, should now act a great support.
We closed at the 38.2% retracement give or take a pip.
So, back to my original question... what next?
There is a possible move much higher based upon the FUNDAMENTALS. Think about it: -
- BREXIT: The event is now signed off, albeit there are still cross-channel trade some issues to iron out. The Government has stated freight is almost back to normal, GBP positive.
- VACCINE ROLLOUT: along with Israel and the U.S. the UK has an impressive rollout in place and this is GBP positive.
- ECONOMIC DATA: Mixed to say the least.
Last week CPi a beat and Retail Sales a huge miss but the predicted result was way too bullish given lockdowns.
GDP was awful, but in a recessionary environment this is to be expected. With Global comparisons the UK is fairing mostly better than its competitors.
It is widely reported that over 2 million adults in the UK have NOT worked for over 6 months.
Overall GBP neutral.
Fair value for the GBP versus a basket of the G10 currencies still shows it undervalued by most opinions. Pre-BREXIT being signed off many analysts talked about 1.5000 and 1.6000 being more reasonable levels for the GBP/USD.
After BREXIT was signed many, me included, expected an immediate run to 1.4000. As we know, that did NOT happen, in it was only last Friday that 1.4000 was breached. In my opinion, the GBP/USD is now INTO THE GREAT WIDE OPEN and it has eyes on higher levels.
For my subscribers to THE WEEKLY FX PREMIUM, I am long the GBP via several shorter-term trades involving cross-rates and long with CORE POSITIONS as well.
If you want to know my MACRO-FUNDAMENTAL longer-term thoughts, you will need to subscribe. For now, it has broken out and held the breakout point on a weekly basis which is bullish. Therefore, one would assume that a move upwards would continue.
2. THE WEEKLY FX PREMIUM: SUBSCRIBERS SECTION:
3. THE WEEKLY FX PREMIUM - PERFORMANCE:
3.1: THE WEEKLY FX PREMIUM: MONTHLY PERFORMANCE:
3.2: THE WEEKLY FX PREMIUM: SUBSCRIPTION INFORMATION:
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 https://www.weeklyfxdrivethru.com you will see more information about the WEEKLY FX PREMIUM.
Lots of information about the way I do things, plus, previous reports about my trades, my trade styles and my trade projections for the year are located on my home page by selecting the appropriate tab located at the top of my home page.
There are 4 options for subscribing: -
- Monthly revolving subscription following a 10 day for $10 trial then a monthly CAD$250.00 per month.
- 10 weeks (c.3 months) = CAD$600.00
- 20 weeks (c.6 months) = CAD$1,000.00
- 40 weeks (c.12 months) = CAD$1,500.00
Further information about how to subscribe to the WEEKLY FX PREMIUM is also located at the top of my welcome page at https://www.weeklyfxdrivethru.com under the “SUBSCRIBE” tab.
4. MY FREE CONTENT SUMMARY:
4.1: DRIVE THRU BLOG “FREE NEWSLETTER & DRIVE THRU ZOOM:
If you already subscribe to this DRIVE THRU blog NEWSLETTER, you will also receive into your inbox my video DRIVE THRU ZOOM and both are100% FREE.
Both are delivered to your inbox usually before noon New York time every Sunday that a DRIVE THRU blog is scheduled to be posted.
Why do I provide FREE content?
Very simply, I hope that what I provide FREE will tempt you to look at upgrading to a FEE-PAYING subscription to my subscription service THE WEEKLY FX PREMIUM. Details about subscription costs can be found on my website https://www.weeklyfxdrivethru.com under the TAB on my landing page titled SUBSCRIBE.
4.2: MY FREE E BOOK & FREE video ZOOM - LINKS:
FOREX TRADING... MY WAY – IT COULD ALSO WORK FOR YOU
THE WEEKLY FX PREMIUM...
TRADING GOALS & OBJECTIVES 2021
E BOOK 2021 LINK:
ZOOM VIDEO LINK:
5. CLOSING THOUGHTS:
Firstly, before finally...
My “YouTube” channel THE WEEKLY FX DRIVE THRU now has a library of the older DRIVE THRU ZOOM presentations. Check it out and maybe subscribe. My intention is to post other “ZOOMS” there from time to time related to FX Trading.
Why not get positioned at the front of the line!
Always remember longevity in Forex trading can only be achieved through trading with good RISK, TRADE and HEAD MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility. Trade with a TRADE PLAN, basically, plan your trades and Trade your Plan.
Mental toughness is key, and this is all about emotional control. Your mind can do amazing things, but only when it wants to, threat and alert will get your mind’s attention.
“Everyone has ability. It always comes down to mind games. Whoever is more mentally strong, wins” – Mohammed Ali.
Finally, be GRATEFUL for your wins and COUNT THEM. Keep a POSITIVE MINDSET in play at all times, regardless of the market conditions.
Stay safe and wear a mask.
The Pip Accumulator
BLOG VERSION: #402 FREE NEWSLETTER
DATE: 21st February 2021