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

Five positive trading days in the past week so I cannot complain. I am seeing sentiment turning bearish in equities and the bullish comments that were so in your face appear to have crawled under rocks!

I have been focused primarily on the AUD/USD and NZD/USD all week, in particular the latter since breaking below the 0.8200 trend line. This was the biggest piece of news for me last week…what a sad life!

As I have said soooooo many times, the commodity currencies lead the way and the Aussie in particular has been doing this. Interventions in ALL markets are now an everyday occurrence. Fundamentals are still important and often lead the way with sentiment the way it is, but right now the Fib. levels are guiding me more than ever….take note.

&nbsp;

<span style="text-decoration: underline;"><strong>2. MY VIEW ON THE NEWS SEEN FROM MY TRADING DESK:</strong></span>
<p style="text-align: center;"><strong><span style="text-decoration: underline;">A BIG WEEK… &amp; A BIG MONTH AHEAD FOR USD, FED, BOJ, RBA, BOE, RBNZ &amp; ECB...GET IN YOUR SUPPLIES OF NESPRESSO RISTRETTO...NOW!</span></strong></p>
An often used daily phrase used to be “Another week, Another dollar”, or as we are now seeing “Another week, another "King" dollar”. Certainly the rise of the USD has taken many people by surprise. It shouldn't, but it has.

At times of ultimate extremes, it is the currency that people turn to,  along with precious metals such as Gold, but, now that Gold is really being seen for what it is, following all the immense QE (Quantitive Easing / Asset Purchase Facilities) policies being forwarded by many leading Central Banks, Gold is on a decline. Gold, I believe consolidating around the present levels c.$1350-$1425 before heading for $1,100 in the next leg lower.

Are we at times of ultimate extreme ?....no I suppose not, but we are in unchartered territory regarding the current and future effects of Central Bank currency manipulation whether directly by the SNB or RBNZ or through the back door as a covert operation like the BOJ, FED, BOC, BOE and the ECB. We are in a currency war, do not listen to crap communiques and bulls**t press releases from the Central Banks and their respective Governments.

So, as traders, listen up.... unchartered territories = uncertainty, uncertainty = fear....and....fear = nearly on every single occasion a run to the USD.

Right now, Japan is sending fear across the waters......the volatility in the Nikkei and subsequent wild moves in JPY pairs is sending a message. The message is fear...look at all the QE that Kuroda and Abe are throwing into the Japanese economy, they are trying to move 20 years or so of deflation out of the economy. A very, very ambitious and bold move, but its stalling, and traders in all markets are puzzled, almost twice as much stimulus as that supplied by the FED to the U.S. markets and it's not going to plan.

Could the U.S. equity markets now stall? Read my previous blogs, I have talked about it regularly for the past six months. The U.S. equity markets are now very range bound and chart wise look like a break lower could happen with a cataylist...could that be Japan?  If the USD continues to strengthen the equity markets will eventually break lower no matter what BEN and the FED do...it's just a question of time and then a question of how far.

Could it be the ECB, who now need to get off the fence, extract the digit from their asses and actually support a policy that will help the entire region to grow other than the present German support policies that have created a two-tier Eurozone? If Draghi can actually convince Merkel and the Bundesbank that stimulus must be focussed towards the Mediterranean, this could be seen two ways by the markets, EUR positive as it could be taken as aggressive pro-activity, or because they are so late to the party EUR negative as it could be viewed  as "Too little too late".

The spanner (wrench) in the works for ECB policy could be the Bank of Italy’s governor and member of ECB Governing Council, Ignazio Visco, who has called for the ECB to produce a further rate cut this Thursday. It will be interesting to see if this carries any more weight as we approach Thursday’s decision date. But this is further evidence that finally there are calls for the tough ECB stance to actually become accommodative to help faltering economies,  help stimulate growth and reduce the regions masses of growing unemployment. Should a rate cut happen….this would be EUR negative and it would strengthen the USD.

This week, we also have an interest rate decision from the RBA. I am not expecting a cut even though the Australian government has stated in several different reports and press releases that they view the Aussie dollar over-valued given economic conditions in Australia. The AUD/USD has fallen 600-700 pips recently and is showing signs of being well oversold right now, I would expect a period of consolidation. For this reason I think the RBA may hold off a month, but you just never know. The overall government policy is to weaken the currency, therefore “not if but when” will rates be cut.  This policy is obviously AUD negative and as a result the USD will strengthen.

In New Zealand,  the government there will follow Australian policies very closely, they too have stated publicly through the RBNZ governor Wheeler that the Kiwi is over-valued. No “Namby-Pamby” approach here from Wheeler with QE….. It’s full on “We have intervened in Fx markets to weaken the Kiwi dollar”  You have just got to love Wheeler, from a slow start he’s really got his teeth into his job now. Weakening the Kiwi will also strengthen the USD.

For the UK, which also has an interest rate decision and Asset Purchase Facility review (QE for the Brits!!)  on Thursday this week, the outlook is not good. Mark Carney (I need too find a nickname for him) the new governor needs to get his feet under the table before we see policies changing/amending. Merv “The swerve” King is in his own exit strategy right now of “Champagne and Cigars” as he hands over the reigns to Carney. He has completed his last swan song meeting in front of the parliamentary select committee and is in "party mode".

The UK economy however has bu**er all to be in party mode over. The recent glimmer or snapshot of what could have been seen as mildly positive economic data has gone. The simple fact is the UK economy is down the toilet. Carney is rumoured to be given a wider mandate with more FED like responsibilities. Watch this space to see what falls out. In any event, the UK needs stimulus that will be GBP negative and once again as a result the USD will strengthen.

Are you seeing the picture that I am painting here?

World uncertainty and need for stimulus is still there despite what has been done so far since 2008. Now I am not saying that everything in the U.S. is rosy….far from it. The U.S. would have GDP at 4% and above if it was that perfect as we are led to believe on some occasions. The U.S. is winning the less ugly competition at the moment but there are snapshots of positivity being seen. Hence all the “Tapering” talk……who would want to be Ben Bernanke?

Ben (the most powerful man in the world) Bernanke will no doubt have a twitching bottom this week as we await the Non Farm payroll numbers on Friday. Good numbers and you can bet the likes of CNBC will have so called experts on the channel giving out whisper numbers and initial targets from which tapering will start. CNBC will NOT be able to stop themselves. I URGE YOU…...pay zero attention. This has never been done before, no-one but no-one has a f****g clue what is going to happen as a result of tapering and no –one has a f*****g clue of the knock on effects in the world equity markets. I believe a coordinated release of some sort may be required to steady matters but then what do I know, I am just guessing. No-one knows how, what, when or the effects.

As stated before, and I will state it again the result of the tapering and uncertainty surrounding it is a move to strengthen the USD.

On Friday if the NFP numbers are good (forget about the fact that people may have just given up looking for work and fallen out of the numbers calculation). If the number is good and the rate of unemployment drops towards 7% away from the current 7.5%, there will be volatility and lots of it. Even though the FED has said at 6.5% QE ends, the whisper numbers will be out there.

As traders what does all this mean moving forward?

I believe that with Central Bank policies throughout the world and the U.S. economy improving the USD will offer us a plethora of pips to make profits from.

I place below four monthly charts, EUR/USD, GBP/USD, AUD/USD and NZD/USD showing where the key levels are in my eyes and the major Fibonacci levels of the big moves looking forward. The target numbers are quite some way away but if the USD gets moving nothing stops it.

<a href="http://weeklyfxdrivethru/wp-content/uploads/2013/06/EURUSD-M-010613.png"><img class="aligncenter size-large wp-image-1800" alt="EURUSD M 010613" src="http://weeklyfxdrivethru/wp-content/uploads/2013/06/EURUSD-M-010613-1024x571.png" width="1024" height="571" /></a>

<a href="http://weeklyfxdrivethru/wp-content/uploads/2013/06/GBPUSD-M-010613.png"><img class="aligncenter size-large wp-image-1801" alt="GBPUSD M 010613" src="http://weeklyfxdrivethru/wp-content/uploads/2013/06/GBPUSD-M-010613-1024x571.png" width="1024" height="571" /></a>

<a href="http://weeklyfxdrivethru/wp-content/uploads/2013/06/AUDUSD-M-010613.png"><img class="aligncenter size-large wp-image-1799" alt="AUDUSD M 010613" src="http://weeklyfxdrivethru/wp-content/uploads/2013/06/AUDUSD-M-010613-1024x571.png" width="1024" height="571" /></a>

<a href="http://weeklyfxdrivethru/wp-content/uploads/2013/06/NZDUSD-M-010613.png"><img class="aligncenter size-large wp-image-1802" alt="NZDUSD M 010613" src="http://weeklyfxdrivethru/wp-content/uploads/2013/06/NZDUSD-M-010613.png" width="660"  /></a>

Remember back in 2008, the AUD/USD and GBP/USD would move 800 pips a day some days due to the volatility that was around at that time. I am not saying we are going to return to that, but, what I do think will happen is that we will get an extended period of USD strength that will allow us to make $$$ in a directional market. It will not be straight down, there will be stop off points but it will be directional.

This is not a time to pick tops and bottoms. With what is ahead there will no doubt be false breakouts as markets come to terms with what is happening and I would not be surprised to see a 15-20% correction in equities as a result.

The moves in the Forex market will be large moves. I am targeting in the next six months as follows if my thoughts come to fruition.
<p style="text-align: center;">EUR/USD: 1.1865
GBP/USD: 1.3920
AUD/USD: 0.8540
NZD/USD: 0.6860
USD/CAD: 1.1280
USD/CHF: 1.0850
USD/JPY: Being honest ….This one is difficult, I haven’t got a clue how this pair will react, I am thinking back to 90.00, but I am not sure.</p>
In any event, the next week is big…the next month or so, even bigger get your supplies of Nespresso (#10 strength) Ristretto  in stock as you are going to need it with all the late night/early morning opportunities ahead.

&nbsp;

&nbsp;

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

At the end of last week I exited trades, re-entered trades and then decided that I needed core positions going ahead so I started establishing positions in four currencies. I have taken profits, added back to positions, the usual stuff, as I trade within my trading plan and financial management strategies.

I will tweet my actions as I go forward with these trades and any others that I may add.
<p style="text-align: center;"><strong>EUR/USD</strong>
<strong> Short</strong>
<strong> Closing Price: 1.2995</strong>
<strong> Cost Average: 1.2975</strong>
<strong> Stop: 1.3225</strong>
<strong> Initial Limit: 1.2360</strong>
<strong> Position Size: 20%</strong>
<strong> Present Position -22 pips</strong></p>
<p style="text-align: center;"><strong> GBP/USD</strong>
<strong> Short</strong>
<strong> Closing Price: 1.5197</strong>
<strong> Cost Average: 1.5176</strong>
<strong> Stop: 1.5280</strong>
<strong> Initial Limit: 1.4300</strong>
<strong> Position Size: 20%</strong>
<strong> Present Position: -24 pips</strong></p>
<p style="text-align: center;"><strong>AUD/USD</strong>
<strong> Short</strong>
<strong> Closing Price: 0.9570</strong>
<strong> Cost Average: 0.9598</strong>
<strong> Stop: 0.9750</strong>
<strong> Initial Limit: 0.8750</strong>
<strong> Position Size: 20%</strong>
<strong> Present Position: +26 pips</strong></p>
<p style="text-align: center;"><strong>NZD/USD</strong>
<strong> Short</strong>
<strong> Closing Price: 0.7937</strong>
<strong> Cost Average: 0.7972</strong>
<strong> Stop: 0.8050</strong>
<strong> Initial Limit: 0.7150</strong>
<strong> Position Size: 40%</strong>
<strong> Present Position: +33 pips</strong></p>
<p style="text-align: center;"><strong> </strong></p>
&nbsp;

<span style="text-decoration: underline;"><strong>4. LOOKING AHEAD INTO THE NEXT 5.5 DAYS OF TRADING:</strong></span>
<p style="text-align: center;"><span style="text-decoration: underline;"><strong>THE MAJOR SUPPORT AND RESISTANCE LEVELS WITH THE USD MAJORS:</strong></span></p>
<strong>EUR/USD: Closing Price 1.2995.</strong>  Initial support lies at 1.2935, but beneath here lies 1.2750, which I consider to be an important level. Resistance is good at 1.3075, after here the May 8<sup>th</sup> high of 1.3194.

<strong>GBP/USD: Closing Price 1.5197</strong>.  Resistance is good at 1.5240. Support is obviously massive at 1.5000. Between here and there 1.5110 should offer some support on the way lower.

<strong>AUD/USD: Closing Price 0.9570.</strong> Resistance should be good at 0.9725, which is the 61.8% retracement of the sell-off since May. Support initially at 0.9530 and below there 0.9450.

<strong>NZD/USD: Closing Price 0.7937</strong>. Now that we are below 0.8000 we are in a real down trending move. 0.7880 and 0.7850 are good moving forward as support and resistance at 0.8010 will be good if we break higher. Obviously the trend line resistance at 0.8200 is massive but it’s well in the background for me now.

<strong>USD/CHF: Closing Price 0.9549</strong>.  This pair is acting a little strange because of the market uncertainty. I am avoiding it but there are some interesting levels as I look at the charts.  0.9525 tests the 38% retracement of the February-May move upwards and if this support gives way 0.9430 is next in line as support. Resistance is 0.9680.

<strong>USD/CAD: Closing Price 1.0373.</strong>  There is big support at 1.0265 and resistance is 1.0460 then 1.0525.

<strong>USD/JPY: Closing Price 100.47</strong>. I see this pair heading lower in the short term at least. 100.00 will be a biggie then its really 99.60 and then 98.60 as support levels. If we break higher, 101.50, 102.10, 103.75 and 105.60 are the notes I have. This pair I am struggling with at the moment and along with the USD/CHF I am avoiding.

&nbsp;

<span style="text-decoration: underline;"><strong>5. NEWS EVENTS IN THE COMING WEEK THAT INTEREST ME:</strong></span>

MONDAY: GBP – Manufacturing PMi.
MONDAY: USD – ISM Manufacturing PMi.

TUESDAY: AUD – Interest Rate decision and Rate statement by RBA
TUESDAY: GBP – Construction PMi.
TUESDAY: AUD – GDP.

WEDNESDAY: GBP – Services PMi.
WEDNESDAY: USD – ADP Non Farm Payroll &amp; ISM Non-Manufacturing PMi.
WEDNESDAY: AUD – Trade Balance.

THURSDAY: GBP – BOE Interest Rate decision &amp; Asset Purchase Facility.
THURSDAY: ECB – Interest Rate decision &amp; Press Conference.

FRIDAY: CAD – Unemployment Numbers and Unemployment Rate.
FRIDAY: USD – Non-Farm Payrolls &amp; Unemployment Rate.

&nbsp;

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

&nbsp;

A big week ahead for news and the markets are going to be extremely nervous. The numbers this week will direct sentiment moving forward.

Trade with smaller positions and use wider stops to allow for the volatility. Do not trade for the sake of trading. Staying in cash can be a good trade!!

Use your trading plans and exercise good money management principles. Do not over extend yourself.

Good Luck,

&nbsp;

Scott Pickering
The Pip Accumulator
Saturday 1<sup>st</sup> June 2013.

&nbsp;

&nbsp;

&nbsp;

&nbsp;

&nbsp;

&nbsp;