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

As I had blogged and tweeted in the past week I have pretty much been sidelined in cash as the summer low volume chop fest was really getting to me and affecting my trading decisions. I was, getting suckered into trades and then getting caught on the wrong side taking losses. I was thankfully trading in small lot sizes, but, I was really hard on myself as I knew that this was going to happen and still I carried on regardless

I have been pretty silent on Twitter, as I have just been a market voyeur….so to speak. The following two news items caught my attention: -

The “Tapering” debate, which, I find pretty pointless, on the basis that a $10 -$15million reduction in a month is not really going to create a shakedown, came once again to the forefront with the release of the FED minutes last Wednesday. In my opinion this is really like a bunch of school kids throwing a tantrum. It is totally pathetic, and quite tedious to follow and listen to overpaid underworked analysts complain about their job. They charge enough in commissions, suck it up and bloody get on with it...boring, boring, boring. On Wednesday at 2.00pm the markets acted confused and reactive and basically went up and down in crazy-like fashion giving a true visual definition of what constitutes a true chop fest. It was a bit of a farce, TV pundits were at sea and to quote one of my boyhood favourite TV programmes, Fawlty Towers. “I have seen better organized chickens running around a farmyard with their heads chopped off”. Soooooooooooo true. The FOMC release added nothing new to the debate and still today at the time of writing, the debate goes on, or rather mutters on.

Chinese PMi data was released by HSBC on Tuesday night and this now shows that China is back producing once again and is above the key mid point reading that defines growth versus slowdown. My question is; given this news and the fact consumer spending data is very, very mixed…who, is China producing for, what are they gearing up production for, because very few areas of the world are spending money! Absolutely bizarre, can you trust this data?

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<b><span style="text-decoration: underline;">2. SIX (6) LONGER TERM TRADES THAT ARE ON MY RADAR:</span></b>

Usually, in this section of the blog, I write a short piece about what is bugging me, or, what is getting on my nerves, or, what I find fascinating in the Fx market currently. I usually take the opportunity to express my fundamental views.

This week for reasons that will become obvious at the end of the blog, I thought that I would document five trades that I am looking at, and have been on my radar for some time.

Three of the six I have entered and there are two where I am waiting for my entry level to be reached. These are in the main, but, not all, exotic pairs that you need to place very wide stops on to accommodate the huge swings.

All of these trades can be very small positions. Set stops that you can afford from your trading plan and then let them run. Move your stops to break even when sufficient profits are achieved and then watch them…hopefully return a good profit. Nothing is guaranteed but these trades offer a great opportunity to make money, in my opinion.

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

I took a long trade earlier in the week (I did not tweet it).

ENTRY (Cost Average): 1.1463
STOP LOSS: 1.1350
LIMIT (Target): 1.1949

From the chart below, you can see that a massive unwind is in play. The key level to break on the long side was 1.1500. This reversal could travel a very long way. The 61.8% Fibonacci retracement level from the last big move lower comes in around 1.2150-1.2200.

From 1.1500 to 1.2200 is 700 pips. If this pair gets traction I really believe this is a great opportunity.

<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/AUDNZD-MONTHLY-CHART-BREAK-OUT-24082013.png"><img class="aligncenter size-large wp-image-1934" alt="AUDNZD MONTHLY CHART BREAK-OUT 24082013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/AUDNZD-MONTHLY-CHART-BREAK-OUT-24082013-1024x516.png" width="1024" height="516" /></a>

<span style="text-decoration: underline;"><strong>2. GBP/CAD:</strong></span>

I entered this trade yesterday morning on the back of excellent UK economic GDP data. It is swinging around but it is in breakout territory in my opinion as long as it stays above 1.6425.

ENTRY (Cost Average): 1.6484
STOP LOSS: 1.6350
LIMIT (Target) 1.8100

From the chart below the opportunity is insane on the unwinding opportunity. There are about 1,600 pips available up to the 61.8% Fibonacci retracement level. It may NOT stop there!!

<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/GBPCAD-MONTHLY-CHART-BREAKOUT-24082013.png"><img class="aligncenter size-large wp-image-1935" alt="GBPCAD MONTHLY CHART BREAKOUT 24082013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/GBPCAD-MONTHLY-CHART-BREAKOUT-24082013-1024x516.png" width="1024" height="516" /></a>

<span style="text-decoration: underline;"><strong>3. GBP/NZD:</strong></span>

I entered this trade at the same time as the GBP/CAD yesterday morning.

ENTRY (Cost Average): 1.9987
STOP LOSS: 1.9850
LIMIT (Target): 2.2450

This trade offers the greatest opportunity if it plays!!

On the chart below, although I am extremely limited with my drawing tools, I have attempted to draw a “Cup and Handle” formation. From the depth of the cup to the rim of the cup is about 2,500 pips. It comes into play on a move above 2.0000 and the target is 2.2500.

<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/GBPNZD-WEEKLY-CUP-HANDLE-24082013.png"><img class="aligncenter size-large wp-image-1936" alt="GBPNZD WEEKLY CUP &amp; HANDLE 24082013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/GBPNZD-WEEKLY-CUP-HANDLE-24082013-1024x516.png" width="1024" height="516" /></a>

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<span style="text-decoration: underline;"><strong>4. USD/JPY:</strong></span>

I wrote a few weeks back about my thoughts on the USD/JPY heading much lower. Tapering has caused more uncertainty in the U.S. markets beyond what I believed possible, and, as a result the USD has regained control over the JPY. Bond yields, to which all the JPY pairs across the board are so sensitive to have rallied over 120 basis points. The USD/JPY being the leader is the most affected and it pulls the other cross pairs with it.

My target entry with this pair is to go long at 99.50. Looking for a move back to the highs around 104.00.

From the chart below, you can see the squeeze opportunity if we break through the crossed trend lines. 99.20 marks the approximate spot, I want to see a full confirmation first.

<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/USDJPY-WEEKLY-CHART-24082013.png"><img class="aligncenter size-large wp-image-1939" alt="USDJPY WEEKLY CHART 24082013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/USDJPY-WEEKLY-CHART-24082013-1024x516.png" width="1024" height="516" /></a>

<span style="text-decoration: underline;"><strong>5. USD/CAD:</strong></span>

I was in this trade last week and was spooked just before the FOMC on Wednesday and I pulled my profits off the table. I would have been sitting very, very pretty had I left matters alone!! Isn’t hindsight a wonderful thing?

I entered long on a pullback to 1.0500, targeting about 1.0850 should we break through 1.0610.

The chart below was to highlight my preferred entry level, which thankfully I was able to achieve. Maybe there is a God looking down on me!.

<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/USDCAD-WEEKLY-CHART-24082013.png"><img class="aligncenter size-large wp-image-1938" alt="USDCAD WEEKLY CHART 24082013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/USDCAD-WEEKLY-CHART-24082013-1024x516.png" width="1024" height="516" /></a>

<span style="text-decoration: underline;"><strong>6. NZD/USD:</strong></span>

Wow, during the week there was a huge 250+ pip daily move lower in this pair.

Like the USD/JPY I am looking to enter on a pullback. I set my sights on 0.8050, but yesterday we broke down through 0.8000. Right now I am assessing the levels but I think I have to wait for a pullback. I will not chase lower, that is crazy and it does not fit in the trade plan that I have for my business.

The chart below highlights the levels that I am looking at. RBNZ governor Wheeler has set the ball rolling in the Kiwi dollar to the down side stating that it is too over-valued. My target level is 0.7360 the 38% Fibonacci retracement of the big move. The doomsday scenario target is between 0.6550 and 0.6430 the 61.8% Fibonacci retracement…yes that is not a typo but it is maybe too far (1,500 pips or so from where we are presently).

<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/NZDUSD-MONTHLY-CHART-24082013.png"><img class="aligncenter size-large wp-image-1937" alt="NZDUSD MONTHLY CHART 24082013" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/08/NZDUSD-MONTHLY-CHART-24082013-1024x516.png" width="1024" height="516" /></a>

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<b><span style="text-decoration: underline;">3. LONG TERM TRADES:</span></b>

I am in four longer-term trades at the moment.

My comments relating to the three trades are posted in the blog section above.

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<p align="center"><b>AUD/NZD:
Entry (Cost Average): 1.1463
Position Size: 40%
Closing Price: 1.1544
Stop Loss: 1.1350
Limit (Profit Target): 1.1949
Profit/Loss:  +81 pips</b></p>
<p align="center"><b> </b></p>
<p align="center"><b>GBP/CAD:
Entry (Cost Average): 1.6484
Position Size: 20%
Closing Price: 1.6336
Stop Loss: 1.6275
Limit (Profit Target): 1.8100
Profit/Loss:  -148 pips</b></p>
<p align="center"><b> </b></p>
<p align="center"><b>GBP/NZD:
Entry (Cost Average): 1.9987
Position Size: 20%
Closing Price: 1.9918
Stop Loss: 1.9850
Limit (Profit Target): 2.2450
Profit/Loss:  -69 pips</b></p>
<p align="center"><strong>USD/CAD:</strong>
<strong>Entry Cost:  1.0499</strong>
<strong>Position Size: 40%</strong>
<strong>Closing Price: 1.0494</strong>
<strong>Stop Loss: 1.0440</strong>
<strong>Limit (Take Profit): 1.0850</strong>
<strong>Profit/Loss: -5 pips</strong></p>
<p align="center"><b> </b></p>
<b><span style="text-decoration: underline;">4. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</span></b>

<b>EUR/USD: Closing Price 1.3379.  </b>The EUR/USD is in a trading range and even with the release of FED minutes earlier in the week it has neither broken out to the upside or downside. We are trapped between 1.3300 and 1.3420. Personally, I wouldn't touch this pair with a barge pole until we get a clear direction on a breakout.

<b>GBP/USD: Closing Price 1.5564. </b>This pair really screwed up my GBP/CAD and GBP/NZD yesterday. We got great GDP data and then a pullback...bloody cable!! I felt soooooo confident that we were on our way to 1,5750 and then 1.6000. It just shows you..never underestimate the Fx market. We now sit in a range 1.5530 to 1.5640. Wait until we break free before placing trades would be my suggestion.

<b></b><b>AUD/USD: Closing Price 0.9021. </b>I am really fearful of a squeeze with this pair so I am unusually NOT shorting. It is my favourite pair to short. I think though that we are capped at 0.9050. We are well supported at 0.8970 and then 0.8940.

<b>NZD/USD: Closing Price 0.7800</b>. I am ready to go short, I just want a pullback to 0.7850.  I thought that I was going to get this yesterday but alas not. I have my order in with my broker at this level, I will have to wait and see. I think that we are really in a big range now of 0.7700 to 0.7850. I hate chasing lower...big decisions ahead.

<b>USD/CAD: Closing Price 1.0494. </b>I never thought that when I sat in front of my computer yesterday morning that I would be in a position to enter long at 1.0500. It just shows you. Here I am long from about 4.30pm Friday. Support is huge at 1.0440 and I see 1.0610 as a key level to break if we are going much higher.

<b>USD/CHF: Closing Price 0.9207.  </b>This pair could be set to drop much lower. I had at the back of my mind that it would hold at 0.9220. That level gave way and the pair is acting a bit Yen-ish from time to time. If 0.9140 gives away we are on for 0.9000. Upside resistance is lying at 0.9290.

<b>USD/JPY: Closing Price 98.67. </b>This pair I feel could go either way. I am not 100% certain whilst it plays the ranges. Once it breaks out, that is a different matter completely. 98.30 to 99.50 is the range that I am monitoring.

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

<b><span style="text-decoration: underline;">5. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</span></b>

SUNDAY: NZD – Trade Balance.

MONDAY: N/A

TUESDAY: N/A

WEDNESDAY: GBP – BOE Carney on the wires!
WEDNESDAY: AUD – PCE figures.

THURSDAY: USD – Preliminary GDP.

FRIDAY: CAD - GDP

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<b><span style="text-decoration: underline;">6. FINAL THOUGHTS:
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<b></b>From my perspective it all looks a little light for me on news events this coming week. This does not mean let the guard down. Thin trading sessions will still be the order of the day, so, trading with caution is recommended. Do not over-stretch your account and keep inside your trading plan limits.

I am away on a short vacation for two weekends, hence why I wanted to break with the normal style blog by placing in the “Drive-Thru” the trades that interest me from a longer-term perspective.

See you next on September 14<sup>th</sup> 2013.

Good luck and take care.

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Scott Pickering
The Pip Accumulator
Saturday August 24th 2013

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Twitter: @pipaccumulator
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