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

Where the hell do I start this time........I feel like I have just completed 15 rounds with Mike Tyson and it's not pretty....not that I consider myself to have pretty boy looks at all but OMG "Glaze my nipples and call me Rita", what a roller coaster ride I have been on these past five days.

I had a reasonable start to the week, then it all went pair shaped.....I bounced back to lose it all on NFP yesterday. I am still in trades right now as I type, but, I had the chance to exit everything yesterday morning, sit back have a glass of Pinot and reflect....that's too bloody easy....why not stay in trades I should have exited and then beat myself about the head with a ruler for an hour or so, it's far more therapeutic and less calories. Golden rule number one....the market rules and dictates movement not me. Lesson well learnt once more!

I traded the AUD/USD mainly to the short side as my tweets and last week's blog refer. In addition, I hung on in there with the USD/CAD long and came within striking distance of an out, if I had only averaged my holding (hindsight is a powerful thing). I also made great pips out of selling the USD/JPY during the week. Plus the usual splattering of profits and losses on the EUR/USD and GBP/USD.

Big news for me in the week.......The UK looks like it can see the "Rim" of the toilet once more some positive news for once, but from an Fx traders perspective just a greater opportunity to short at higher levels with an enhance risk/reward ratio...1.5600 is a tough old nut for this pair to crack. Helicopter Ben said bugger all about poor U.S. economic data at at the FOMC release last week and it looks that it was a good move given the employment data with the NFP release yesterday. My only gripe is that it's total fiction...how many people have dropped out of the system? It seems the U.S. obsession with group hugs and pats on the back will persist even though most people acknowledge that the numbers are total boll***s. Finally, last but not least...Draghi ( a Puppet of Berlin) had his ECB conference on Thursday with the usual how can I say what I've said before a thousand times and make it sound different. Transitory...a great word of Ben's at the FED and accommodative another Ben word, he has now adopted as part of his language. Great stuff...what about helping the periphery? A rate cut of 0.25% hurrah! Three hip hip hoorays for Super Mario....In my mind too little far too late. Germany could not give a hairy rats a** about the periphery. Every time I look at EZ flag and its stars......they stand for core values such as "Harmony", "Unity" and "Solidarity" etc...it might in principle but as with everything in the EZ more BS.

&nbsp;

<span style="text-decoration: underline;"><strong>2. THE VIEW FROM MY TRADING DESK:</strong></span>
<p style="text-align: center;"><strong>MR. NOWOTNY...THE FIRST RULE OF A CURRENCY WAR..."KEEP YOU GOB SHUT"</strong></p>
My reason for picking this as a topic is that we are in strange times...despite all the denials from politicians (mind you half of them deny everything as a point of order, the rest, well most of them dont know what day it is never mind anything else!), country head leaders (Prime Ministers, Presidents) , the IMF, G7 &amp; G20 need I go on anymore......?   we are living slap bang in the middle of a currency war. The main goal of a currency war......weaken your currency to make exporting finished goods cheaper, whilst at the same time state publicly you like your currency strong as this message delivers ..Power, Stability, Control and Leadership to your voters, but in the background remember treat your currency as if its on sale!!

The  FED (USA) is the biggest currency manipulator in the world , Ben is pumping $85 Billion dollars per month into the markets to keep equities inflated and the US$ weaker (quantitive Easing). Not to be put off, the UK instead of calling their easing (QE)  refer to it as an Asset purchase Facility. The Swiss (SNB) has a 1.2000 peg in place on the EUR/CHF currency pair. The ECB has offered many options that are pseudo QE or an Asset Purchase but are sneaky backdoor facilities that have not really worked as the US$ facility is massive and outbids all other players, but the ECB is at it in their own slimy way. Enter the Dragon, yes the Chinese are at pegging their rates artificially against the US$ and now finally the Japanese are at it. Abe (New Prime Minister) and Kuroda (BOJ Governor) are on the biggest weakening in history to try to get inflation back into the Japanese markets (Target 2%) and at the same time buying bonds like it's a Wal-Mart sale to try and ease and weaken the YEN. It's working and the countries listed already are complaining saying its currency manipulation....oh yeah right..."Pot calling the kettle black".

So we have a currency war, everyone is in the game. As with everything out of the Eurozone there are so many players that consider themselves MVP's it is virtually impossible to contain all the ego's.

Enter Ewald Nowotny (Governor of the Austrian Central Bank),

God love him.....he just loves getting his face on TV and his name in papers and on web sites, but  Nowotny really fu**ed up on Friday morning.

Draghi comes from Italy, he knows life in the periphery......he is on a direct puppet like string to Merkel in Berlin. She pulls it and he does as he is told ( I use the puppet on a string picture rather than clips attached to his testicles and wired to the mains electric power, in case that caused offence).

There are 27 members from the overall EU on the board of the ECB. You can bet your bottom dollar that they have not all  been saying no move on interest rates for the past six months and although its one country one vote, Germany has one really big vote, and, to be honest it contributes the most to the Eurozone so why shouldn't it have a big vote. Over recent months despite growing economic concern over the increasingly poor data released within the Eurozone it has been able to keep interest rates unchanged.

This month however, with a very public run of poor data PMi's, GDP's and record unemployment to name but three subjects...the pressure to cut was too much to hold back.

This would mean that borrowing costs for the periphery would reduce and help them with exports over the medium term. At the Press Conference the questions this month were surprisingly more adventurous than usual and somebody piped up to ask Draghi what else was left in the tank from the perspective of keeping money in the high street banks to force them to lend to get markets moving and hopefully see a cut in the unemployment lines. To keep money in high street banks, instead of them depositing money with ECB an earning interest, the questioner raised the matter of charging the banks interest to deposit money with the ECB..termed negative interest rates. Draghi said basically in his way of saying things that nothing was off the table and that the ECB would remain open and accommodative, in fact "The ECB was technically ready".......great sign to  weaken the EUR/USD from high 1.3100's to mid 1.3000's in minutes happy days for me I was short.......nothing wrong with all this at all.....friendly banter I'd call it!!

Move forward 21 hours and god love the unfortunate Ewald Nowotny as he says on CNBC Europe with Geoff Cutmore (I like this guy, he is one of the very, very, very few on this channel I have any time of day for), there had been no discussions on "Negative Interest Rates" for banks depositing with the ECB....it's a difficult subject, one of many options, but not relevant in the near future...this subject is nothing but of short-term relevance. From 1.3050 these comments triggered a short covering rally to 1.3135 in the EUR/USD......

Then "Quelle surprise"...three hours later Nowotny comes back to the media to say...."You got me all wrong"....."How could you  interpret what I said the way you did"...interesting. what he didn't say was that he probably had a phone call from Draghi and a severe boll**king along the lines of: - "F**k you, you stupid Austrian Gob shi**, what the F**k are you doing, I spent yesterday trying to weaken this f***ing currency once and for all and you with the big gob Austrian Gob in two minutes this morning have just reversed all my good work"

In the interim period between Nowotny's original statement and return to the media we also had Erkki Liikanen from the Finnish Central Bank say that "Negative Interest" rates have regularly been discussed as an option...which would backup Draghi from the Press Conference...this means this guy is good at knowing what to say in a currency war situation,or, he is just a bloody good a** licker!!

The bottom line......We are in a currency war Mr. Nowotny in case it slipped by you, you divvy.......the first rule of a currency war is to deny that there even is one but more importantly keep your gob shut. Every one point in the favour of your currency over the opposing one means millions of dollars in exporting prices alone. The EZ is f***ed and needs every little bit of help it can get right now. It's a classic, the ECB behaves like the politicians in the Eurozone in the sense that they just cannot get in line and be consistent. Someone always wants to get their 5 minutes of fame and the temptation to break rank is too much for most of them to take. In a currency war it just is not good enough.

As it happens, yesterday we saw blowout numbers on NFP and the USD weakened against everything eventually as equities leapt up like a salmon.........

Where does all this leave the trades of the EUR/USD?

I think the pair will come under pressure next week as normality sets in once again and the Draghi press conference notes are re-read. Lets just hope Nowotny's quotes are taken as just that without substance to the move forward. Deep down, everyone knows it makes sense for the EUR/USD to be trading much, much lower towards 1.2000. It's a slower week on Eurozone news next week and given the macros on the EUR/USD I think that we will test 1.2950 at some time but first we have to break below the magnet that is 1.3000. We must also remember that the ECB is on a weaken the EURO trip right now so this should keep the pressure on to the down side plus there are already mutterings about another 0.25% cut by July......

Longer term I still believe that the EUR/USD is heading to 1.1500-1.1800. The ECB and most of the EZ except Germany probably want this, but, the fall has to be an orderely decline over many months not a 1,000 pip drop in three weeks like the GBP/USD had recently. Watch this space.

&nbsp;

<span style="text-decoration: underline;"><strong>3. MY LONGER-TERM TRADES:</strong></span>
<p style="text-align: center;"><strong>AUD/USD</strong>
<strong>Short</strong>
<strong>40% position size</strong>
<strong>Entry/ Cost Average: 1.0259</strong>
<strong>Stop Loss: 1.0400</strong>
<strong>Target/ Profit: 0.9800</strong>
<strong>Closing Price: 1.0316</strong>
<strong>Present Position: -58 pips</strong></p>
I am still short this pair and have been for sometime now. My long term view is that this pair is still underperforming in relation to the S&amp;P, given that the equity markets are at all time highs one would expect to see this pair blasted through 1.1500 at the minimum, yet it has been struggling to get through 1.0400. This break from the usual correlation must NOT be ignored. Can you imagine what will happen with this pair should the equity markets pullback!!
<p style="text-align: center;"><strong>NZD/USD</strong>
<strong> Short </strong>
<strong>20% position size </strong>
<strong>Entry/ Cost Average: 0.8486</strong>
<strong>Stop Loss: 0.8581</strong>
<strong>Target/ Profit: 0.7800</strong>
<strong>Closing Price: 0.8532</strong>
<strong>Present Position: -48 pips</strong></p>
<p style="text-align: center;">I am not happy with this trade and I had the opportunity to get out yesterday with a small profit. Whilst I do feel that this pair is the most overpriced currency pair in the marketplace it has still held up incredibly well of late. I do believe that as the Aussie falls this pair will come screaming along with it and so I will not let this one run away too far.</p>
<p style="text-align: center;"><strong>USD/CAD</strong>
<strong>Long</strong>
<strong>20% position size</strong>
<strong> Entry/ Cost Average: 1.1112</strong>
<strong>Stop Loss: 1.0020 </strong>
<strong>Target/ Profit: 1.0600</strong>
<strong>Closing Price: 1.0076</strong>
<strong>Present Position: --34 pips</strong></p>
<p style="text-align: center;">I am still long and have been now for over two weeks. I have taken profits off the table early on in this trade but it is an increasingly frustrating pair to trade. There are so many false hopes and it has been range trading for so long. I am confident that I am trading this pair the correct way for now, and, like the NZD/USD I will not let it run away from me.</p>
<p style="text-align: center;"><strong>EUR/USD </strong>
<strong>Short</strong>
<strong>20% position size </strong>
<strong>Entry/ Cost Average: 1.3114</strong>
<strong>Stop Loss: 1.3200</strong>
<strong>Target/ Profit: 1.2650</strong>
<strong>Closing Price: 1.3113 </strong>
<strong>Present Position: -1 pip</strong></p>
<p style="text-align: center;">The macro fundamentals are lower for this pair and I am now cost averaged just above 1.3100. I will add only on confirmed breaks below 1.3000 and 1.2950.</p>
<p style="text-align: center;"><strong>GBP/USD </strong>
<strong>Short </strong>
<strong>20% position size </strong>
<strong>Entry/ Cost Average: 1.5532</strong>
<strong>Stop Loss: 1.5625</strong>
<strong>Target/ Profit: 1.4800</strong>
<strong>Closing Price: 1.5571</strong>
<strong>Present Position: -41 pips</strong></p>
<p style="text-align: center;">1.5600 has seen to be a tough nut to crack. I am now cost averaged at 1.5532. Although we have some better economic data of late the underlying trend is lower.</p>
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>4. LOOKING FORWARD...THE SUPPORT AND RESISTANCE LEVELS IN THE COMING WEEK WITH THE USD MAJORS:</strong></span></p>
<p style="text-align: left;"><strong>EUR/USD: Closing Price 1.3113.</strong> A bit of a roller coaster week although we really just range traded 1.2950 to 1.3280 all week. This is a very narrow trading range for this pair. Moving forward 1.2950 and 1.3250 needs to be broken to get a directional move going.</p>
<p style="text-align: left;"><img class="aligncenter size-large wp-image-1708" alt="EURUSD MONTHLY 050513" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/EURUSD-MONTHLY-050513.png" width="660"/></p>
<p style="text-align: left;"><strong>GBP/USD: Closing Price 1.5571.</strong> This pair has topped out at 1.5620 and this will be a tough nut to crack. 1.5600 has offered a great opportunity to get short over the past week, we are ready for a break out with this pair and whilst I think it will break lower, we need to break 1.5480 or 1.5620 to set up a direction.</p>
<p style="text-align: left;"><a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/GBPUSD-WEEKLY-05052013.png"><img class="aligncenter size-large wp-image-1709" alt="GBPUSD WEEKLY 05052013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/GBPUSD-WEEKLY-05052013-1024x571.png" width="1024" height="571" /></a></p>
<p style="text-align: left;"><strong>AUD/USD: Closing Price 1.0316.</strong> We are in a trading range of 1.0200 to 1.0400. We closed the week after record highs in the equity markets just above 1.0300, and, by coincidence the mid point of the trading range.</p>
<p style="text-align: left;"><a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/AUDUSD-240M-05052013.png"><img class="aligncenter size-large wp-image-1707" alt="AUDUSD 240M 05052013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/AUDUSD-240M-05052013.png" width="660" /></a></p>
<p style="text-align: left;"><strong>NZD/USD: Closing Price 0.8532</strong>. The trading range is 0.8400 to 0.8580. My bias is to the short side over the medium to the long term and if/when equities eventually fall so will this pair. Like the Aussie it is not bursting a gut to the upside like the equity markets but it is much stronger than the Aussie in comparison.</p>
<p style="text-align: left;"><strong>USD/JPY: Closing Price 98.99.</strong> I really do not know which way to approach this pair going forward. 100.00 is a bigger hurdle than most analysts thought that it was going to be. I feel certain that a break above 100.00 will catapult this pair to 105.00 very quickly but I have no confidence that 100.00 will be broken this coming week as there are no supportive news items to help. So, it is play the range again support at 97.00 to resistance at 99,60.</p>
<p style="text-align: left;"><strong>USD/CAD: Closing Price 1.0076.</strong> This pair flatters to deceive, on a very regular basis. It needs a good breakout rather than the umpteen false breakouts seen of late over the past month or so. 1.0020 to 1.0260 is the range to follow.</p>
<p style="text-align: left;"><a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/05/USDCAD-MONTHLY-05052013.png"><img class="aligncenter size-large wp-image-1710" alt="USDCAD MONTHLY 05052013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/05/USDCAD-MONTHLY-05052013-1024x571.png" width="1024" height="571" /></a></p>
<p style="text-align: left;"><strong>USD/CHF: Closing Price 0.9352.</strong> The range here is 0.9280 to 0,9410.</p>
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>5. MAJOR NEWS EVENTS COMING UP THIS WEEK THAT INTERESTS ME:</strong></span></p>
SUNDAY: AUD - Retail Sales.
MONDAY: EUR - Draghi Speaks.
MONDAY: CAD - Building Permits and Ivey PMi.
MONDAY: AUD - Trade Balance.

TUESDAY: AUD - RBA Statement and Cash Rate

WEDNESDAY: NZD - Employment Change and Unemployment Rate.
WEDNESDAY : CNY - CPi

THURSDAY: GBP - Bank Rate and Asset Purchase Facility.
THURSDAY: AUD - Monetary Policy Statement.

FRIDAY: CAD - Employment Change and Unemployment Rate.
FRIDAY: USD - Bernake Speaks.
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>6. FINAL COMMENTS AND CLOSING THOUGHTS:</strong></span></p>
<p style="text-align: left;">Although it is not as action packed a week as last week's there is still lots on the agenda. There are many pairs in breakout territory, GBP/USD and USD/CHF to name but two that are close, but the are others close as well like the EUR/USD  and the USD/CAD. Therefore, the bottom line is to be prepared and as one of  the pairs is the USD/CAD, be prepared for a false breakout either side.</p>
Personally, I intend to be less gun-ho this week and concentrate on my levels and targets.......
<p style="text-align: left;">Trade in line with your trade plan and keep within your money management guideliines....I intend to.</p>
<p style="text-align: left;">Scott Pickering
The Pip Accumulator
Saturday 4th May 2013.</p>