30.11.2013

<b><span style="text-decoration: underline;">1. INTRODUCTION:</span></b>

During the past week, there were some very profitable end of the year “RADAR” trades. In addition to those that I listed in last weekend’s blog, the NZD/USD short, the EUR/NZD and GBP/NZD long all produced great profits. I took my positions off the table (when I tweeted) probably a little early, as the cross-rate pairs ran even higher. However, at the end of the day one cannot complain when profits are being banked.

I also launched my initial communication regarding the new “Premium Service“ for 2014. Many thanks, to those followers who contacted me and gave some great feedback to the initial communication. I am working with my software guru to refine the login procedures and the mechanics to point subscribers to the new area including the exclusive “Radar Trades”, “Trade Ideas / Set-ups” and “Flash Trades” sections. All will become very clear, very soon.

Next week will probably be my last week for trading in 2013. Previous years have shown me that together with the summer months, trading around these times is a little boring due to little or no momentum as we just tend to range trade but at the same time it is quite risky as there are thinner trading volumes, and it can ruin your broker account balance. It is a crazy time. Given that today one “Bit Coin” is the same value as an ounce of Gold…I rest my case, regarding crazy times!!

&nbsp;

<b><span style="text-decoration: underline;">2. THE VIEW FROM MY TRADING DESK:</span></b>
<p align="center"><b><span style="text-decoration: underline;">ECB EXECUTIVE BOARD MEMBERS TO STAR IN LONDON WEST END CHRISTMAS PANTOMIME
</span></b><b><span style="text-decoration: underline;">(Order your tickets now from www.wecantagreeonadamnthing.com)</span></b></p>
Over the past few weeks my headline titles for this blog have been: -
<p align="center">I BELIEVE THAT THE SMART MONEY IS LEAVING EQUITIES AND MOVING INTO CASH (9<sup>th</sup> November 2013)</p>
<p align="center">ARE WE HEADING FOR ANOTHER EUROZONE CRISIS (16<sup>th</sup> November 2013)</p>
<p align="center">THE COMMODITY CURRENCY DIVERGENCE CONTINUES (23<sup>rd</sup> November 2013)</p>
I try to write as serious as I can but with tongue in cheek at times to keep this blog fresh and different. The last three headline titles are pretty serious titles on serious subjects, and, I think I made some valid points based upon my views.

This week however its all change. Eurozone numpties are back in play, this time the Executive Board of the ECB, plus many of the Eurozone Central Bank Governor’s comments in the press.

At the last ECB Interest Rate decision and subsequent Press Conference, Draghi cut interest rates by 0.25%. The EUR/USD dropped like a lead balloon from about 1.3600 to 1.3300 and ever since has been recovering. It now sits back around 1.3600. The periphery Eurozone countries who frankly needed the rate cut must be in some despair given the fact that EUR/USD has strengthened by pulling back by over 300 pips. They need help to reduce unemployment amongst many other important matters and lower banking costs to try and help them become more competitive and export. The lower exchange rate as you could imagine would help tremendously.

What has astounded and I must admit amused me are the actions by the Executive Board of the ECB, which, is responsible for policy implementation. You would expect complete harmony in approach, total policy agreement, complete 100% unity and agreement on direction. Yeah…right!

The Executive Board only have four key responsibilities: -
<ol>
	<li>To prepare Governing Council Meetings.</li>
	<li>To implement monetary policy for the Eurozone in accordance with the guidelines specified and decisions taken by the Governing Council. In so doing, it gives the necessary instructions to the Eurozone NCB’s.</li>
	<li>To manage the day-to-day business of the ECB.</li>
	<li>To exercise certain powers delegated to it by the governing council. Mostly regulatory.The current Executive Board members are: -Mario Draghi – President of the ECB
Vitor Constancio – Vice-President of the ECB
Jorg Asmussen
Benoit Coeure
Yves Mersch
Peter Praet</li>
</ol>
On most weekdays at least one Executive Board member delivers a speech with a subsequent press release about Eurozone ECB policy and the best of all they add their snippet of personal opinion’s and information on any ECB matter. It is these snippets that just drive the markets sometimes into a frenzy, for the simple fact the snippets often do not adhere to policy. From my perspective it just fuels my fundamental view that these people act like numpties / idiots and I question their validity to be in the roles that they have.

Let me be specific on just one recent example. There were other topics but this was my favourite.

<b>NEGATIVE INTEREST RATES:</b>

Benoit Coeure spoke on European Economic integration on the 23<sup>rd</sup> November. Shortly after he stated that “Negative interest rates” were on the table “Do NOT” rule them out.

This was followed by Draghi, announcing, “NO…nothing has changed...it’s (Negative Interest Rates) not part of our policy nor has it been discussed in any detail”

Yves Mersch spoke on 26<sup>th</sup> November and basically said don’t rule out anything and discussions have taken place on all monetary options including negative interest rates.

Jorg Asmussen, speaking on the 27<sup>th</sup> and 28<sup>th</sup> of November talked about dealing in reality in the Eurozone…God that must have been fascinating...what type of bloody reality are these people in? Negative Interest rates came up again.

My point is; do these people sit in the same meetings, and more importantly, do they listen? Do the have meeting minutes and action points by member distributed at the end of the meeting or the day after?

My thoughts on this ECB Executive Board are as follows.
<p style="text-align: center;" align="center"><i>Basically, I see zero unity, zero harmony, no agreed approach to the press it is a free for all say what you like deal. It lacks a business-style approach and encourages speculation, which fits perfectly into the “Can kicking down the road scenario”.</i></p>
<p align="center"><i>Executive Board members must be go out talk to the press tell them what they want to hear.</i></p>
<p align="center"><i> The next guy out will deny it</i></p>
<p align="center"><i> Then the next guy will put it on the table again.</i></p>
<p align="center"><i> Then we hand the baton to the next guy to deny. </i></p>
<p align="center"><i>This way we never make a decision and “kick the can down the longest road in history for as long as we eat and breathe”.</i></p>
&nbsp;

That is my belief regarding the policy of the ECB Executive Board, it’s amateurish and pathetic. It is a pantomime and I struggle to take these people seriously. I firmly believe that Draghi is a puppet of Merkel and basically nothing is done without the say so confirmation from Berlin. These guys might as well book a theatre in the London’s West End and do a “Week in the life of…” farce. It would be a sell out.

It makes it very simple for us as traders on what to and what not to do, although the volatility that these numpties create is incredible at times and we just have trade around the volatility. As traders we should only listen to and act upon Draghi’s comments from the ECB as he speaks with a German accent. He is a puppet of Berlin and the other board members are loose cannons. Draghi does not control them, or does not want to control them. In a Bruce Willis (or the like) movie they would be referred to as “Rogue Agents”.

At the same time comments of a political nature inside the Eurozone I would only pay attention to Merkel.  As for the rest (Country Head Leaders, Finance and Foreign Ministers) are mere vegetables on the plate…they are simply not the main course.

I do believe that very shortly, probably early 2014 the ECB has to act to weaken the single currency. How they do it, is up for grabs but take your lead from Draghi ignore the other Executive Board members it is a title only position that carries zero weight. In 2014 I still believe that the EUR/USD will be trading sub 1.2000.

&nbsp;

<b><span style="text-decoration: underline;">3. MY CURRENT LIVE TRADES:</span></b>

I currently have no live trades at the moment.

<b><span style="text-decoration: underline;"> </span></b>

<b><span style="text-decoration: underline;">4. TRADES THAT ARE ON MY RADAR:</span></b>

I am continuing to look at the exotic crosses once again, as well as my old favourites: -
<p align="center">EUR/CAD
GBP/CAD
EUR/AUD
GBP/AUD
GBP/NZD
EUR/NZD</p>
<p align="center">Plus</p>
<p align="center">AUD/USD
NZD/USD
USD/CAD</p>
<p align="center">Tempting me as well</p>
<p align="center">USD/CAD
GBP/USD</p>
&nbsp;

The exotic pairs are now pulling back and some are consolidating after huge momentum upside moves. So I will look at these next week to enter long after pullbacks. I still see that the continuation moves still have some way to go and there are thousands of upside pips still available.

I am not 100% certain of my targeted entries yet, but below you will see an indication of my thoughts. If I enter I will tweet my entry, stop and limit.

Please take care this time of the year. If the market moves against you do not let any of the trades that you are in, in particular these exotic cross-rates listed below get away from you. Cut your losses.

CURRENCY PAIR               ENTRY                       TARGET

EUR/CAD                              1.4250                       1.5500

GBP/CAD                              1.7100                       1.8000

EUR/AUD                              1.4770                       1.5500

GBP/AUD                              1.7700                       2.0180

GBP/NZD                              1.9940                       2.2450

EUR/NZD                              1.6600                       1.7035

(All of the above trades are long trades)

All of the above pairs are very volatile with huge daily ATR’s. I would recommend that if you decide to take trades with these pairs to take smaller positions with very wide stop losses to accommodate the increased levels of volatility.

AUD/USD (Short)                 0.9210                       0.8800

NZD/USD (Short)                 0.8250                       0.7750

USD/CAD (Long)                 1.0511                       1.0850

&nbsp;

USD/CHF (Long)                 0.8950                       0.9250

GBP/USD (Long)                 1.6220                       1.6500

I must stress and the point that I want to make here is that I am waiting for the trades to come to me. Not all may activate but the entry level and the risk associated with these trades is very important.

&nbsp;

<b><span style="text-decoration: underline;">5. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</span></b>

<b>EUR/USD: Closing Price 1.3590.</b> Not too much of a change in position from last week. I feel that if this pair were to test and break resistance around 1.3630 then 1.3700 would be seen very quickly thereafter.  We closed virtually at 1.3580, which is an important level vis-à-vis the bull/bear line. Having said that I feel that the bears will assume control should we break support at 1.3550, then we head to 1.3450 next.

<b>GBP/USD: Closing Price 1.6359. </b>This pair is on fire and very, very bullish. Look at the cross-rates GBP/CAD, GBP/AUD, GBP/JPY and GBP/NZD. Should we break through resistance at 1.6380, I think we will head to 1.6500 and then 1.6700 soon after. Support lies at 1.6300.

<b>AUD/USD: Closing Price 0.9107</b>. Basically a further fall of 50 pips from last Friday’s close. Personally, I want to see a pull back on Sunday’s open to 0.9210 before resuming the downtrend, however, I am not so certain that we will get it. Support at 0.9060 is a key line to determine the fate of this pair. Should it break lower through the next level at 0.9000, personally I think that it will be just a matter of weeks before we are at 0.8500, which I believe is the RBA objective.

<b>NZD/USD: Closing Price 0.8112</b>.  Like the Aussie, about a further 50 pip fall in the week’s closing position compared to the previous weekly close.  This pair is in a “Head and Shoulders” pattern with a measured move to about 0.7700. It may take weeks to play out, and, given this pair’s recent stubbornness at falling, it probably will take several weeks to play out. A break of the range 0.8100 to 0.8250 is required to give us a momentum push. At the moment I am not short this pair, but I want to be. My target entry would be on a pull back to 0.8250 if possible…just not sure that I am going to get it.

<b>USD/CAD: Closing Price 1.0606.  </b>We have broken out above 1.0600. We need to see this as a confirmed move next Sunday / Monday. If this move can be confirmed, it sets up a major change in market sentiment. This pair is one of my market lead indicators. The best trade long would preferably be around 1.0510 would be at the lower support level of the range, but I doubt that this level will be seen, 1.0560 offers a little support. On the other side of the trade 1.0675 is the next resistance level assuming that we stay above 1.0600.

<b>USD/CHF: Closing Price 0.9059</b>.  We closed this week around the same levels as last week. If you think that the EUR/USD is going lower over the coming sessions, this is not a bad area to go long with good support at 0.9050 and then below at 0.8990. Resistance lies ahead at 0.9100 then 0.9150. If you think that the EUR/USD is moving higher wait and see if this pair can fall below 0.8900 and pick it up towards 0.8800.

<b>USD/JPY: Closing Price 102.40. </b> Over 100+ pips higher week on week and I got the whole move in this pair completely wrong from a few weeks ago. I was expecting 95.00 before 105.00. It looks like for the time being the grind higher will remain in full swing. The next resistance level after 102.60 is probably 103.00 then 103.50.  Support is good at 101.60 then 101.00.

&nbsp;

<b><span style="text-decoration: underline;">6. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</span></b>

SUNDAY: AUD – Building Approvals

MONDAY: GBP – Manufacturing PMi
MONDAY: USD – Bernanke Speaks and ISM Manufacturing PMI.
MONDAY: AUD – Retail Sales, Interest Rate and RBA Statement.

TUESDAY: GBP – Construction PMI.
TUESDAY: AUD – GDP.

WEDNESDAY: GBP – Services PMi.
WEDNESDAY: USD – ADP Non-Farm Employment Change &amp; Trade Balance.
WEDNESDAY: CAD – Trade Balance, BOC Rate Statement and Interest Rates.
WEDNESDAY: AUD – Trade balance.

THURSDAY: GBP – Asset Purchase Facility &amp; Interest Rates.
THURSDAY: EUR – Interest Rates &amp; ECB Press Conference.
THURSDAY: CAD – Building Permits.
THURSDAY: USD – GDP &amp; Weekly Unemployment Claims.
THURSDAY: CAD – Ivey PMi.

FRIDAY: CAD – Employment statistics &amp; Unemployment Rate.
FRIDAY: USD – Non-Farm Payrolls &amp; Unemployment Rate.

<b><span style="text-decoration: underline;"> </span></b>

<b><span style="text-decoration: underline;">7. THE PREMIUM SERVICE:</span></b>

As I mentioned earlier, I am launching a new “Premium Service” for traders who may want to go to the next level of support. The following section highlights what will be in the “Premium Service” and what changes will take place with the Weekly Fx Drive-Thru.
<p align="center"><b>THE WEEKLY FX DRIVE-THRU PREMIUM SERVICE  2014 </b>

As I mentioned in last weekend’s blog, next year I am looking to introduce a “Premium Service” for those who want it. The “Drive-Thru” in its current format will remain as is; with one exception the  “Radar Trades” will now only be available via the Premium Service. In addition, “Trade Ideas and Set-ups” that are tweeted will now only be available to Premium Service subscribers inside the secure section of the Weekly Fx Drive-Thru. I will also be introducing “Flash Trades” these will be up to the minute as it happen trades.

The new Premium Service will not just be solely based on Radar Trades. Over the past several months, feedback from subscribers to the “Drive-Thru”, or from readers of the blog via Google+, LinkedIn or Twitter have been raising many questions about Forex Trading in general, such as: -<b> </b>

</p><p align="center"><b>Placing Stops</b></p>
<p align="center"><b>Strategies on entry and exit</b></p>
<p align="center"><b>Working with a Trade Plan</b></p>
<p align="center"><b>What is a Trade Plan?</b></p>
<p align="center"><b>Risk Assessment</b></p>
<p align="center"><b>When to fade trades</b></p>
<p align="center"><b>How to cost average effectively</b></p>
<p align="center"><b>How to use Trade Zones effectively - Buy Zones and Sell zones</b></p>
<p align="center"><b>Working with Fibonacci levels</b></p>
<p align="center"><b>How to find a good broker to partner with</b></p>
<p align="center"><b>Chart analysis</b></p>
The list is quite extensive, however, it refers to all the recent questions that I have answered.

To have a learning centre available and to look at the trades that are on my radar at the same time seemed to be a very good fit as a trading philosophy…hence the Premium Service.

I am also looking to do training and information based “Webinars” to Premium Service subscription members, if I have sufficient participants.

Whilst upon first look, it may appear that the Premium Service is directed solely a new traders, or those with intermediate skill levels. Please note this is not my intention. Training can be lonely, and sometimes it is good to feel that you are part of a team. With this in mind, I am thinking that a “Chat Room” style area would be of benefit to all traders to share ideas and trade set-ups. Plus, new trader or experienced trader it is always good to have library of information available close at hand.

The Weekly Fx-Drive-Thru will remain, and will continue to be posted weekly on Saturday’s although it will be a shorter version.

The Midweek Fx Fix will cease immediately and in 2014 the Premium Service will be available to those who want to take advantage. The training and background support material will be added on a regular basis to grow into a library of effective Fx trading tools

What are the costs?

My initial thoughts are as follows: -

There will be 40 weekly blogs / issues per year (I will not write in the Summer and over Christmas periods), with an unlimited amount of follow ups during the week to review and act upon “Radar Trades” and issues emanating from previous blogs. In addition trade ideas for trades already in play would also be part of the service, as I will be trading my own trade recommendations.

I do not want to become a finance administrator on a daily basis so I want to keep the subscription options as few as possible.
<p align="center"><b>ANNUAL (40 WEEK) SUBSCRIPTION: $750.00 (this equates to $18.75 per week) </b></p>
<p align="center"><b>20 WEEKS SUBSCRIPTION: $450.00 (this equates to $22.50 per week) </b><b> </b></p>
<p align="center"><b>10 WEEKS SUBSCRIPTION: $250.00 (this equates to $25.00 per week) </b></p>
<p align="center"><b>(ALL FEES ARE IN USD)</b></p>
I would like to get your feedback to this proposal.

If you have the time please respond to me at <a href="mailto:scott@pickering.bz">scott@pickering.bz</a> with your thoughts on the “Premium Service” and whether you think that this is something you would sign up for and take advantage of.

<b><span style="text-decoration: underline;"> </span></b>

<b><span style="text-decoration: underline;">8. FINAL THOUGHTS:</span></b>

We have a very busy week ahead for major news items that will without doubt move the markets. Personally, I think that this will be my final week of trading 2013, so my positions, if any, will be small.

We are heading into ‘silly season” on thin trading volumes. Smaller and thinner trading volumes create wilder moves sometimes based on nothing that can cost you money so be careful.

As always, trade smaller with wider stops to establish your position, only then do you add in, but it should be in line with your trading plan. Do not over-stretch yourself and let the trades come to you. Price your entries and establish your risk prior to taking a trade. This is a sound practice and it works.

Good luck and take care.

Scott Pickering
The Pip Accumulator
Saturday November 30th 2013

FOLLOW ME AT:
Twitter: @pipaccumulator
Google+/scottpickering

&nbsp;