<strong>
</strong>

<strong> </strong>
<ol>
	<li><span style="font-size: 12pt;"><strong> INTRODUCTION:</strong></span></li>
</ol>
I talked last week about the USD index (DXY) being at a breakout point and that should it breakthrough some key levels of resistance, the ensuing move could present a great DIRECTIONAL TRADE opportunity for Forex traders. I also provided what I called the DOMINO EFFECT for the markets in general should the DXY breakout.

One week later and we are still poised in the DXY for the big move higher. It has moved further and one could say we are now at the precipice of the breakout. The pullback in the DXY that many analysts called for has simply not happened as we have consolidated the move upward.

Here is exactly what I wrote last time. I have written in <span style="color: #0000ff;"><strong>BOLD BLUE TYPE</strong></span> those moves that have in my opinion started: -

<em>What are dominoes that I see falling?</em>

<em>These are not in what I believe the order will be, but it is my assessment of what may happen. Plus: this can all happen very, very quickly.</em><em> </em>

<span style="color: #0000ff;"><strong><em>USD index: Hits 85.00 or above as both the EUR and JPY continue to weaken.
</em></strong><em>
<strong>EUR/USD: Slips through 1.2760 and heads for 1.2500.
</strong>
<strong>USD/JPY: Breaks through 109.00 with conviction and heads towards 112.00.</strong></em></span>

<em> <strong><span style="color: #0000ff;">TREASURY BOND YIELDS: They continue to rise as Bond prices fall, fueling the USD/JPY move higher.</span>
</strong>
GOLD: Starts to drop through $1200.00 on the back of the start of USD strength and heads towards $1,100.00.</em>

<em> COPPER: Starts to look as if it is about to head for a test of $3.00 as the precious metals markets start to sell-off.

<strong><span style="color: #0000ff;">COMMODITY CURRENCIES: They start to fall ahead of the equities markets. AUD/USD heads through support and targets 0.8500. The NZD/USD drops as well and heads towards 0.7500. The USD/CAD catches a lift through 1.1100 and heads towards 1.1500.</span>
</strong></em>

<em>OIL (WTi): Tests $90.00 and breaks lower towards $85.00. The move is accelerated as the USD continues to head towards 90.00.

<span style="color: #0000ff;"><strong>COMMODITY PRICES: Start to come under pressure and fall.</strong></span></em>

<span style="color: #0000ff;"><em> <strong>THE VIX: This starts to trade at new highs.</strong></em></span>

So; the above has started to take effect, and, as I wrote earlier in the week for PREMIUM SERVICE subscribers…. “Watch commodities as they lead, then the commodity currencies, bonds and Forex all follow, and then finally equities move. Equities are ALWAYS the last to the party”. Regular readers of the WEEKLY FX DRIVE THRU will be very familiar with this phrase that I use.

From my perspective the week was a little disjointed. I was away for two days for meetings in Saratoga Springs NY, and trading whilst travelling is always a little fragmented and sometimes challenging to say the least. It was a great trading week; having written all of that and if this is what DIRECTIONAL TRADING is about…bring it on almost 700 pips banked on Friday alone!

Big news for me over the past 7 days was Graeme “Wheeler the dealer” Wheeler the governor of the RBNZ talked about direct intervention in the currency markets to achieve the fair price of the NZD. “Happy Days”… this should see the NZD/USD around 0.7300 to 0.7450 soon. This I think is the area that he is aiming for and if my DXY breakout happens it could be even lower, especially if you add in an equity market correction. The only thing to worry about with a short NZD trade is that 95% of the market is also short.

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<strong> </strong>
<ol start="2">
	<li><strong><span style="font-size: 12pt;"> THE PREMIUM SERVICE: –</span>

</strong></li>
</ol>
<p style="text-align: center;"><span style="font-size: 12pt;"><strong>OVERVIEW, TRADING ACTIVITY, NEWS UPDATE &amp; MONTHLY AND
</strong><strong>YEAR TO DATE TRADING SUMMARIES:</strong></span></p>
<span style="text-decoration: underline;">2.1 OVERVIEW:</span>

For new readers who may not be aware, I refer to the PREMIUM SERVICE quite a lot in this blog and for more details about what it is, and, how much it costs, you will need to go the welcome page of <a href="http://www.weeklyfxdrivethru.com">www.weeklyfxdrivethru.com</a> At the top of the page there are three drop down menus: PREMIUM SERVICE, SIGN-UP and DISCLAIMER. Further details and how to join are all contained there. You will need at PayPal account to subscribe.

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<span style="text-decoration: underline;">2.2 TRADING ACTIVITY:</span>

Without doubt one of the best trading weeks for the year so far, almost 1,000 pips based off single lot sized trading. The strength of the USD was something else at times, very resilient, very shallow pullbacks and moves were fast. It was challenging to set limit orders trades. It really was a time to accept that entry levels were not that crucial and that just small pullbacks may be all that was on offer so one just had to run with small pullbacks. I was left way behind on limit order trades involving the USD/NOK, USD/SEK and USD/MXN. But this was more than compensated with the working trades.

At the end of this month I am going to publish the end of quarter detailed review of the PREMIUM SERVICE. To say that I am delighted with the performance so far would be an understatement. My goals and objectives with single lot trading for a new trader is a niche market position and to see returns of: -
<p style="text-align: center;"><strong>MICRO LOTS – cost of trades $36.60 - PROFIT $ 797.30</strong>
<strong> MINI LOTS – cost of trades $366.00 - PROFIT $7,973.00</strong>
<strong> STANDARD LOTS – cost of trades $3,660.00 - PROFIT $ 79,740.00</strong></p>
<p style="text-align: center;"><strong>(All from single lot trades total of 366 trades 2014 to date)</strong></p>
The PREMIUM SERVICE really caters for all sizes of wallets.

<strong> </strong>

<span style="text-decoration: underline;">2.3 MONTHLY AND YEAR TO DATE TRADING SUMMARIES<strong>:</strong></span>

Below I show the up to date performances for my various trading styles. Full excel spreadsheets are in the subscriber area of the PREMIUM SERVICE website.

Below are the excel spreadsheets covering this month so far and the year 2014 to date.

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/PREM-SERVICE-PROFITS1-27092014.png"><img class="aligncenter size-full wp-image-4409" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/PREM-SERVICE-PROFITS1-27092014.png" alt="PREM SERVICE PROFITS1 27092014" width="446" height="420" /></a>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/PREM-SERVICE-PROFITS2-27092014.png"><img class="aligncenter size-full wp-image-4410" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/PREM-SERVICE-PROFITS2-27092014.png" alt="PREM SERVICE PROFITS2 27092014" width="452" height="418" /></a>

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

The above examples in sections 2.2 and 2.3 are for illustration purposes only. The profitability examples detailed above are based solely upon single lot trading, regardless of lot type. If multiple lot sizes are traded the profitability margins will be different than those shown.

Just to provide more information so you understand where I am coming from with the risk / reward statements above. All of my trades are of different sizes and different size lot types. The above does not reflect the actual trading performance, but it does show you the direction of the performance of the trades placed. I like to add to trades, profits are taken as the trade progresses and my overall cost average moves several times. All of my trades are of different lot styles. I trade a mixture of micro lots, mini lots and standard lots across my brokers.

The above results simply display your profit or loss if you placed a single lot trade on all the set-ups suggested and did nothing else.

You must always remember to follow properly executed RISK MANAGEMENT and POSITION SIZING disciplines with all your trades and remember that Forex trading with a high degree of leverage can significantly increase your profits and losses. You should trade with a TRADE PLAN and NOT risk monies that you cannot afford to lose.

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<strong> </strong>
<ol start="3">
	<li><span style="font-size: 12pt;"><strong> THE FUNDAMENTAL TRADERS OVERVIEW:</strong></span></li>
</ol>
<strong> </strong>
<p style="text-align: center;"><span style="font-size: 12pt;"><strong>IS THE EUR/USD HEADING FOR 1.2000?</strong></span></p>
This week we have an ECB Press Conference, and to say that this one, above all of the others, is more eagerly awaited is in my opinion not the correct phrase to use. In the past these events have brought some great surprises but in the main over an extended period of time they tend to disappoint more than surprise or actually make you think that something is actually about to happen. “Kicking the can down the road” originated from the ECB Press Conference because Mario Draghi’s hands are tied and it is Angela Merkel and Germany than run matters at the ECB despite the claims of independence. So for me, this meeting and Press Conference to me is just another one, and personally, I feel that Draghi is so far behind the curve events worldwide may help him actually catch up.

All this aside, this Thursday sees Mario Draghi place himself in the spotlight once again to tell us how he fighting DEFLATION, MASSIVE UNEMPLOYMENT and THE HIGHLY INFLATED SINGLE-CURRENCY.

This week however he has the backdrop of Russian sanctions hanging over him as Putin has now decreed that a compulsory acquisition of foreign property assets in Russia is an option that he is looking at. This has no doubt sent shivers down the spines of many business owners across Europe who have very strong trading ties with Russia… none more than Germany that probably has the closer trade ties in Europe with Russia. This could be a game changer. If Putin was to write this into law it could be recession time for the EUROZONE.

There will be no doubt be questions about this at the Press Conference, which, Draghi will no doubt swat away like an annoying fly around food at a picnic table but I would say the conversations over a nice bottle of Claret in the ECB and Bundesbank in Brussels and Frankfurt have been focused on the “Surely Putin wouldn’t do that” “and if he did, how do we react to the news” conversations. Remember, Germany exports about 30% of its exports in raw materials or finished goods to Russia. This is big consequence news.

For now I am not looking at this as potential breaking news. I see this as Putin flexing to try and tone down future sanctions due to be imposed on Russia. But stranger things have happened and I would not be surprised to hear he has passed this law irrespective of what Europe does next.

Moving on, Draghi must be pleased with the decline in the EUR/USD. We now sit just on 1.2700. I remember the ECB Press Conference from May 2014 and the high was 1.3989. That was 1300 pips ago and we still have more room to fall.

We have dropped 1300 pips so far. How far does the EUR/USD need to go?

As I have written on a few occasions of late, now that the FED Monetary Policy has changed to one of tightening and raising rates, it is at a complete opposite from the ECB that is entering a period of loosening to maybe “infinity” with policies to weaken the single currency and promote economic growth.

The USD index (DXY) is in breakout mode. It is ranging between 85.10 and 85.50. If it breaks 86.00 it has a real opportunity of an explosive move higher towards 92.00. If the DXY reaches 92.00 this could have, in my opinion, the EUR/USD at 1.2000 or maybe even a little lower.

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/DXY-27092014.png"><img class="aligncenter size-large wp-image-4408" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/DXY-27092014-1024x544.png" alt="DXY 27092014" width="1024" height="544" /></a>

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<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/EURUSD-MONTHLY-27092014.png"><img class="aligncenter size-large wp-image-4407" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/09/EURUSD-MONTHLY-27092014-1024x491.png" alt="EURUSD MONTHLY 27092014" width="1024" height="491" /></a>

However, I think that it’s not all about Draghi anymore, and what he may or may not do regarding Quantitative Easing (QE). Remember he has “October” out there as a start date; in EUROZONE / ECB terms this could be Spring 2015 or beyond!

The FED and the USD will determine the future exchange rate of the EUR/USD more so that the ECB and the EUR. The divergent monetary policies between the FED and the ECB are enough to send the EUR/USD lower no matter what “spin is spun” at the upcoming ECB Press Conference. It is in Draghi’s interest to send the EUR/USD lower and he may well have had a figure in mind, but we will never know what this was, in my opinion; I believe that the DXY will determine the level in the EUR/USD.

If Draghi was to add in QE into the “pot” this would exacerbate the move and levels of 1.1800 may be on the cards, but that is speculation and a guessing game. Goldman Sachs Group is calling EUR/USD parity inside three years… brave call. Who knows?

If Putin acts, the DXY moves to 92.00, Draghi introduces QE and Japan really sets the wheels in motion to weaken the JPY towards 120.00 (USD/JPY), the Goldman prediction could become a reality. Stranger things can happen.

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<strong> </strong>
<ol start="4">
	<li><span style="font-size: 12pt;"><strong> TRADER TOPICS:</strong></span></li>
</ol>
<strong> </strong>
<p style="text-align: center;"><span style="font-size: 12pt;"><strong>ARE YOU PREDICTING PRICE ACTION?
WELL STOP IT!</strong></span><strong> </strong></p>
After some time as a trader gathering experience, for some traders this experience can delude some traders into believing that they can fully predict future price action. It can be tempting after thousands of hours of screen time in developing your analytical skills, it can be tempting to assume that you know the markets inside out.

This type of assumption is dangerous because it can give you the belief that you have infallibility in predicting future price movements. This is typically manifested when a trader is overconfident with his ideas that he refuses to acknowledge the possibility of error.

But, as most traders (me included) have had their fair share of loss making trades can attest, the uncertainty within the Forex market is one of its attractions. Nobody at all no matter whom, no matter how much financial data is available can accurately predict price action. Insisting that you have some special ability to forecast exactly how a currency pair will move can ultimately lead to your down fall as a trader.

One should remember that this is different from getting a good feel of the markets behavior through constant practice. This process aims to achieve the ability to actively learn and improve throughout your trading career. This entails you being able to accept your losses, admit your mistakes, re-evaluate your trade strategies, and make the necessary changes. In fact, the goal of repetitive deliberate practice is the total opposite of thinking that you are unstoppable as an all-knowing and an all-powerful trader.

As a competent trader you should focus on being able to adjust to market uncertainty. The question is of course, how can you be able to make adjustments if you refuse to accept that it’s impossible to completely predict market behavior?

It is as I have written about in previous articles and blogs for traders to develop certain biases for certain currency pairs. It is these biases that guide us as traders in looking for trade set-ups. Research in analyzing the markets and staying updated on economic events should help you figure out if the current environment supports your bias or not. Just make sure that you stay flexible with your biases to prevent it from turning into a prediction, which is no longer open to confirmation or negation from market factors.

<strong> </strong>

<strong> </strong>
<ol start="5">
	<li><span style="font-size: 12pt;"><strong> MY CURRENT LIVE TRADES:</strong></span></li>
</ol>
&nbsp;

<strong>FLASH TRADES:</strong>

No LIVE trades at the present time.

&nbsp;

<strong>RADAR TRADES:</strong>

RT143
AUD/NZD
Long
Long at 1.1200
Stop at 1.0900
Limit at 1.1550
Present Price: 1.125
Current Profit / Loss Position: -75 pips

<strong> </strong>

<strong>FUNDAMENTAL TRADES:</strong>

No LIVE trades at the present time.

<strong> </strong>

<strong> </strong>
<ol start="6">
	<li><span style="font-size: 12pt;"><strong> TRADES THAT ARE ON MY RADAR:</strong></span></li>
</ol>
Yesterday, Friday 26<sup>th</sup> September, I decided to close down all but one LIVE trade and banked $$$. I did this on the basis that the strength of the USD (DXY) was getting stretched and the next move could be explosive but a period of consolidation may happen first. I closed these trades looking for consolidation and then hopefully a pullback to allow me to re-enter again.

I now have therefore, have a number of trades on my RADAR moving forward. As I have written several times, we are now entering a directional market, which means that, I am not too fussy about the exact entry price as the direction is already known. The big pullback entries quite frankly haven’t worked because pullbacks across the board have been really shallow. Instead of major Fibonacci levels dictating my entries, sometimes just good horizontal support is enough. We seem to be trading in good ranges within either bullish or bearish overall trends so my entry levels that I am looking at are relatively easy to set-up.

My ideas around the USD majors are based upon simple pullbacks. I am expecting a nice pullback over the next few sessions and a short consolidation period: -

EUR/USD short at 1.2720-60
GBP/USD short at 1.6320-50
AUD/USD short at 0.8840-80
NZD/USD short at 0.7920-70
USD/CHF long at 0.9450-80
USD/CAD long at 1.1050-1.1085

USD/SEK, USD/NOK and USD/MXN: - these pairs are so bullish it is almost as if you just have to close your eyes and enter long. The pullbacks have been really shallow. I have decided that the only way is to react to these on the day and try to establish a position off a 50-pip pullback.

EUR/NZD and GBP/NZD: - These pairs I will re-enter next week on the NZD/USD pullback to about 0.7920-50.

EUR/AUD and GBP/AUD: - Similar to the NZD (above) as the AUD/USD pulls back that will determine my entry level.

I will react to all of the pairs as the market unfolds next week. To list out a series of proposed entry levels has not been working of late because of the shallow pullbacks.

From my perspective, it therefore makes sense for me to tweet entries and react to the markets as they unfold. There is little point bombarding you with extreme positioned charts as simple pullbacks look to be the way to enter trades at the moment.

<strong> </strong>

<strong> </strong>
<ol start="7">
	<li><span style="font-size: 12pt;"><strong> LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</strong></span><strong> </strong></li>
</ol>
<strong>EUR/USD: Closing Price 1.2680.</strong> It was about a 150-pip drop in the EUR/USD this week. Pullbacks have been minimal; if you wanted to enter this pair short you really had to look at just a 15-20 pip pullback. The USD is so strong it has given us directional trading but not the usual style of entry into a trade. There is an ECB meeting and Press Conference this week. I think that this pair has the potential for another 200-pip fall before we stop and consolidate. Looking forward I see support at 1.2540 and resistance at 1.2750.

<strong>GBP/USD: Closing Price 1.6239</strong>. Not much of a decline in cable this week. During the week this pair had stayed well quite well supported, in fact BOE Governor Carney spoke of interest rate rises in the past few days. However, the rate increase comments were treated as the “Boy who cried Wolf” as on previous times when Carney has spoken, it has just been comparable to take your choice of one of the following, bulls**t, camels**t, or, cows**t. If the USD breaks-out, there will be no stopping the cables decline and I think that 1.5500 to 1.5750 could be achieved but it’s way too early to make a call. For now 1.6200 to 1.6420 is the range that interests me.<strong> </strong>

<strong>AUD/USD: Closing Price 0.8758</strong>. The sell-off continues with the Aussie. It’s just a question of how far can this pair fall. I would have imagined a few months ago when Glenn Stevens the governor of the RBA spoke about the AUD valuation being too high this was around 0.9500-0.9750 and maybe 0.8500 was the area that he had in mind. I believe with a correction in equities and the USD strength coming back into play 0.8000 could be the revised target. For this week, however, I think that we will have great support at 0.8700 and resistance at 0.8850.

<strong>NZD/USD: Closing Price 0.7861</strong>. This is a runaway train currency only going in one direction, and with RBNZ Governor Wheeler stating that he would directly intervene, if necessary in the currency markets, this pair in my opinion, could be off to 0.7250 when all is said and done. For this week I see 0.7725 being great support and resistance back at 0.7950 will be strong.<strong> </strong>

<strong>USD/CAD: Closing Price 1.1141.</strong> The breakout in this pair is about to start and personally, I want just one more pullback in order for me to get long. I fear that I may have missed this trade, only time will tell. Support is good at 1.1050-85 and resistance is good at 1.1230. I do think that if this pair scales past 1.1230, there is the opportunity for move towards 1.1800-1.2000.

<strong>USD/CHF: Closing Price 0.9511</strong>. This pair is the cusp of a breakout towards 0.9600 and beyond. The only thing to bear in mind when trading the CHF is the geopolitical safety trade. Its moved are not mirroring those of the EUR/USD to the same extent at the moment so perhaps a little caution is required. Support is good at 0.9450 and resistance at 0.9580.

<strong>USD/JPY: Closing Price 109.27. </strong>We have consolidated over the past 7 days. I think that this pair is about to do a “BUZZ LIGHTYEAR” move of to infinity and beyond, with a move through 110.00, heading for the 112.00 resistance. I just have this thought that 120.00 is where we are going if the USD strength hits the market. BOJ easing compared with FED tightening is a good match for a big move. Immediate support is at 108.60 and the upwards move has been capped so far at 109.45. A break through here and I think it could be a hold on to your hats move!

<strong> </strong>

<strong> </strong>
<ol start="8">
	<li><span style="font-size: 12pt;"><strong> MAJOR TRADING PAIRS WITH LONGER-TERM TRENDS MATCHING:</strong></span></li>
</ol>
The following currency pairs have Short Term (DAILY), Medium Term (WEEKLY) and Long Term (MONTHLY) charts all trending in the same direction.

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

USD/CAD
USD/CHF
USD/JPY
EUR/AUD
GBP/AUD
GBP/CHF
AUD/NZD
USD/DKK
USD/NOK
USD/SEK
EUR/SEK

&nbsp;

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

EUR/USD
GBP/USD
AUD/USD
NZD/USD
EUR/GBP
AUD/JPY
NZD/JPY
EUR/CAD
AUD/CAD
EUR/CHF

&nbsp;

<strong> </strong>
<ol start="9">
	<li><span style="font-size: 12pt;"><strong> MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</strong></span></li>
</ol>
SUNDAY: N/A.

MONDAY: NZD – ANZ Business Confidence.
MONDAY: CNY – HSBC Manufacturing PMi.

TUESDAY: EUR – Flash CPi.
TUESDAY: CAD – GDP.
TUESDAY: CNY – Manufacturing PMi.
TUESDAY: AUD – Retail Sales.

WEDNESDAY: GBP – Manufacturing PMi.
WEDNESDAY: USD – ADP Non-Farm Employment Change.
WEDNESDAY: USD – ISM manufacturing PMi.
WEDNESDAY: AUD – Building Approvals &amp; Trade Balance.

THURSDAY: GBP – Construction PMi.
THURSDAY: ECB – Interest Rates and Press Conference.

FRIDAY: GBP – Services PMi.
FRIDAY: USD – Non-Farm Employment Change &amp; Unemployment Rate and FRIDAY: USD – Trade balance and ISM Non-Manufacturing PMi.
FRIDAY: CAD – Trade balance.<strong> </strong>

<strong> </strong>

<strong style="font-size: 12pt;">10. FINAL THOUGHTS:</strong>

There are some big news items on the agenda for this coming week. Combine these with the potential USD strength moves and we could have a great week of trading. It could be exceptional if the moves and news all fall together to push the USD (DXY) higher.

I think that as we hopefully enter a confirmed period of DIRECTIONAL TRADING, your trade entries are not as crucial to maximize your potential profit from the ensuing pip move, as the direction is as guaranteed as you are ever going to get. Being 10 or 15 pips too early or too late upon entering a trade is not going to have a disastrous overall effect. The only point that I would make is to keep sizes small at the outset and then add to your position sizes as the trades develop.

Good Luck.

Scott Pickering
The Pip Accumulator
Saturday September 27th 2014

EMAIL / FOLLOW ME AT:
premiumservice@weeklyfxdrivethru.com
Twitter: @pipaccumulator
Twitter: @ThePremService
Google+/scottpickering

<strong>DISCLAIMER:</strong>

FLASH, RADAR and FUNDAMENTAL trade set-ups, “Tweets” and “Trade ideas” that are posted in my blogs or on Twitter are trades and set-ups that interest me. They are provided for training and informational purposes only and should not be interpreted as an offer, solicitation or recommendation of any specific security or investment strategy. Past performance is not indicative of future results. Trading Forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial adviser if you have any doubts.

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