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

I hope that all you guys had a successful week of trading. There were certainly directional opportunities for all of us to profit from at the end of the week. Last week was my best week's trading year to date....thank God....because I was getting bored and I mean bored with the market. I was thinking of calling it an early close for the summer and taking an extended break.

Lots of pieces have been written about the dramatic moves seen over the last few days,  but really it was just a continuation of what was already developing in the markets. The inter-market correlations between Equities, Commodities, Bonds and Forex previously politely defined as "stretched" are now long gone, key relationships within specific markets were questionable.

I have remained long the USD for a few weeks now and on Thursday the USD exploded on the back of the move towards 100.00 by the USD/JPY. The crazy thing was that "Twitter" went a little wild towards the end of the week with very high expectations on moves, and the  potential pip gains that were written about were incredible....I think that far too many fully leaded coffees were taken and no-one thought to try a de-caf!!

The RBA opened up talk of further weakness and rate cuts ahead on Tuesday night, then Wednesday night both the New Zealand and Australian Job numbers were blow outs, poo-pooing the previous nights comments a little. The RBNZ also said that it was openly interfering in the currency markets to weaken the New Zealand dollar.....well that's it they are all it.....so much liquidity we are going to drown as everywhere is flooded by central bank liquidity. Crazy times......

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<span style="text-decoration: underline;"><strong>2 THE VIEW FROM MY TRADING DESK:</strong></span>
<p style="text-align: center;"><span style="text-decoration: underline;"><strong>NICE VOLATILITY IN FOREX....BUT DO NOT GET CARRIED AWAY....YET!!</strong></span></p>
So....it finally happened.

The break with correlations between markets finally gave us something that many people (myself included) have spoken or written about over the recent weeks. Personally, I do think that some people "Lost the run of themselves" by getting well carried away with predictions and pip moves. What we all do have to remember is that the Forex markets are flexing, as we had reached many break out scenarios at the same time, and correlations failed completely, but we did not break down. Major levels of support and resistance were tested and pierced but by the end of the week most currency pairs came back to key levels having just probed below or above trend lines.

Below is a snapshot of my experiences these past few days.....

<em>Two news events in the week were high on my agenda, and still being long the USD, I went into both news events holding smallish positions. With both the AUD and NZD the employment data was better than the market predictions and both currencies strengthened on the news. (I had been short both the AUD/USD and NZD/USD from earlier in the week ahead of Tuesday night's RBA Interest Rate announcement). After the release of the Employment data on both occasions, to say that I was pist off would be a huge understatement, but my stops were well positioned, and working with good money management, and, my "Trading Plan", I remained in both trades albeit that they were both now loss trades having reversed position from before the data dump. Overnight Wednesday however, both trades pulled back once more and when I awoke on Thursday morning I was still  in two loss trades but now much smaller losses.</em>

<em>On Thursday morning, I was still long the USD/JPY, and closed out a deal just before lunch-time on a pullback.....normally I would just let it go....but, I was a little bored.  About one hour later the USD strengthened like crazy, on the back of the USD/JPY taking aim for 100.00. My long USD CAD and USD CHF trades that were previously dead did a "Lazarus" and raced to great profitable positions. The AUD/USD and NZD/USD shorts from the previous night along with  GBP/USD and EUR/USD shorts that I had tweeted about that morning all came alive.....I jumped back in the USD/JPY as it exploded higher......and whoopee...the rest is history.</em>

<em>All my trades from Wednesday night until Friday lunchtime were just all winners and big ones. All this success...but, we only really just tested the range limits, the major levels were tested but for me they held.</em>

Those were my experiences and reactions over the past couple of days....probably very typical of many traders.

At the same time as trading I was watching CNBC (why...God only knows..it was about as relevant or useful as a chocolate teapot). I was listening on line to a webinar that had Fx content, reading charts, both candlestick and pressure charts and trying to monitor my trades to maximise the profit potential. In fact, on Thursday lunchtime just before the USD launched I was playing on Ebay and went into my trading room initially to check on my EUR/USD and GBP/USD short trades about one minute after the USD/JPY took off.....my timing was lucky.

So what am I saying this week?

Basically, we had the chance to make a few pips in a trending market for 36 hours...but nothing else as levels basically held. The equity markets are still rising and whilst they are not turning lower  we will not see dramatic Forex moves to coincide.

Can you just imagine what would happen if the equity markets pulled back?

The AUD/USD probed below parity yesterday but closed at 1.0021. The AUD/USD has failed to go up with the once tracked side by side relationship with the S&amp;P. As I have written on numerous occasions over the recent months the AUD/USD should be at record highs of 1.1500 or above to correlate with the S&amp;P all time highs. Instead as the S&amp;P hits all-time highs the AUD/USD probes below parity.  If the S&amp;P rolls over and pulls back, can you imagine where the AUD/USD will go? But we should not go there until the equity markets pullback, and, right now with the FED supporting the markets to the tune of $85 Billion per month that may still be a ways off, although I think that D-Day is getting much, much closer.

Keys levels to watch for with the USD majors if equities roll over are in my opinion: -
<p style="text-align: left; padding-left: 300px;">EUR/USD: 1.2850 (Key support on measured move from wedge breakout)
GBP/USD: 1.5250 (1.5350 (61.8% Fib.) was channel support for two months)
AUD/USD: 99.00 (Key support from measured move on a Daily wedge breakout)
NZD/USD: 0.8250 (Next support following Daily trend line breakdown)
USD/CAD: 1.0150 (Key resistance from previous break lower)
USD/CHF: 0.9650 (Fib. extension on Daily chart 161.8%)
USD/JPY: 102.50 (Fib. extension on Daily Chart 161.8%)</p>
So to sum up....equities need to roll over before we get carried away. The levels above are major levels to keep in mind.

The temptation to get "Stuck in" on USD strength may be a little  premature. Yesterday and Thursday offered large moves but I feel we may see some consolidation before the next move and I think for the move to hold water we will need to support of equities pulling back as well.

Do not get carried away...there will be thousands of pips available when it happens.

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<span style="text-decoration: underline;"><strong>3. MY LONGER TERM TRADES:</strong></span>

I have no open positions.

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<span style="text-decoration: underline;"><strong>4. LOOKING AHEAD INTO NEXT WEEK....THE MAJOR SUPPORT AND RESISTANCE LEVELS WITH THE USD MAJORS:</strong></span>

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<span style="text-decoration: underline;"><strong>EUR/USD: Closing Price 1.2986.</strong></span>
<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/EURUSD-240-11052013.png"><img class="aligncenter size-large wp-image-1733" alt="EURUSD 240 11052013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/EURUSD-240-11052013.png" width="660" /></a>

As you can see from the chart above. The wedge pattern has been broken and the measured move to the downside is 1.2850. The levels to watch next week are 1.2850 to 1.3050.

<span style="text-decoration: underline;"><strong>GBP/USD: Closing Price 1.5359</strong></span>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/GBPUSD-DAILY-11052013.png"><img class="aligncenter size-large wp-image-1734" alt="GBPUSD DAILY 11052013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/GBPUSD-DAILY-11052013-1024x571.png" width="660" /></a>

1.5350 is a key support level for this pair and we pulled back to close at this level yesterday. !.5250 to 1.5500 is the range.

<span style="text-decoration: underline;"><strong>AUD/USD: Closing Price 1.0021</strong></span>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/AUDUSD-DAILY-11052013.png"><img class="aligncenter size-large wp-image-1732" alt="AUDUSD DAILY 11052013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/AUDUSD-DAILY-11052013-1024x571.png" width="660" /></a>

Wow. This is the pair to closely watch. The range is now 0.9960, then 0.9900 (0.9850) up to 1.0115 resistance.

<span style="text-decoration: underline;"><strong>NZD/USD: Closing Price 0.8294</strong></span>

If 0.8250 gives way properly we will see 0.8000 pretty quickly. 0.8450 will offer good resistance.

<span style="text-decoration: underline;"><strong>USD/JPY: Closing Price 101.59</strong></span>

This pair is hard to read on levels. Basically, it is a runaway freight train. We should allow a little time to consolidate given the size of the recent move. I am thinking the range for now is 101.00 through to 102.50.

<span style="text-decoration: underline;"><strong>USD/CHF: Closing Price 0.9567</strong></span>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/USDCHF-DAILY-11052013.png"><img class="aligncenter size-large wp-image-1735" alt="USDCHF DAILY 11052013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/05/USDCHF-DAILY-11052013.png" width="660" /></a>

The range here is 0.9500 to 0.9650.

<span style="text-decoration: underline;"><strong>USD/CAD: Closing Price 1.0097</strong></span>

The most frustrating pair in the Fx market for me. 0.9990 to 1.0150 needs to be broken for me to get interested gain. Remember, this pair has a lot of catching up to do given the fact it has hardly moved of late so when it moves it will be, or rather hopefully, it should be, spectacular.

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<span style="text-decoration: underline;"><strong>5. THE MAJOR FX NEWS EVENTS THIS WEEK:</strong></span>

WEDNESDAY: GBP - Claimant Count, Inflation Report and Merv "the Swerve" is talking......

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<span style="text-decoration: underline;"><strong>6. CLOSING THOUGHTS AND FINAL COMMENTS:</strong></span>

There are a few "Code Red" news events next week but only the UK employment data and Mervyn King's speech interest me.

There will be no Fx Drive-Thru next weekend as I will be traveling away from Montreal. Tweeting will be very limited if at all. Normal service will resume the week after next upon my return back home.

Be careful, do not over trade until the market moves are confirmed. Expect a period of consolidation and at the same time do not be surprised if we see a lot of market volatility. Remember the commodity markets are acting poorly, Gold and Oil are struggling so these may influence moves that create false breakouts, be aware of this.

Good luck and trade carefully,

Scott Pickering
The Pip Accumulator
Saturday May 11th 2013.