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<strong>1. INTRODUCTION:</strong>

The week just passed was a very difficult trading week for me. I was completely wrong about the RBNZ and governor Wheeler’s statement content, then the next day BOE governor Carney’s Mansion House address talking about raising rates took me and the whole market by surprise. The results from these two news items were, big losses from my broker accounts.

As I have written in the TRADING ESSENTIALS section of the website, you have to expect losses when trading, it’s how you pick yourself up and get back in the saddle that differentiates you from other traders and gives you longevity as a trader.

So, moving on, I am now focused on what the effects of the RBNZ and BOE will have together with all the other front-line news that hit the markets last week.

Geopolitical news is dominating matters, tensions in Iraq, with Iran looking to get involved will have an effect on the delicate balance of matters in the Middle East. The Russian tank movements, in and around the Ukraine border are obviously something that cannot be ignored and finally the price of OIL. OIL has been steadily drifting up in price this past week or so, on the back of supply issues from the Middle East and comments emanating from the recent OPEC meeting.

We also have a full FOMC Statement and Press Conference this week on Wednesday.

On Thursday, we have the SNB meeting and also have a Press Conference. Will they react to the recent ECB actions of easing?

All in all there is a lot to consider and without doubt the opportunities for some swift Forex movements are with us. I seem to remember blogging and tweeting saying that the summer trading is now here a little earlier than usual. I may have been just a tad premature with that comment.

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<strong>2. TRADING SUMMARY:</strong>
<p style="text-align: center;"><strong>RADAR, FLASH and FUNDAMENTAL TRADES
</strong><strong>JUNE 2014 and YEAR to date:</strong></p>
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.

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS1-15062014.png"><img class="aligncenter size-full wp-image-3874" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS1-15062014.png" alt="PREM SERV PROFITS1 15062014" width="455" height="421" /></a>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS2-15062014.png"><img class="aligncenter size-full wp-image-3875" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS2-15062014.png" alt="PREM SERV PROFITS2 15062014" width="461" height="423" /></a>

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The above examples 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.

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<strong>3. THE FUNDAMENTAL TRADERS OVERVIEW:</strong>
<p style="text-align: center;"><strong>FOMC THIS WEEK – I THINK THAT YELLEN HAS A DILEMMA</strong></p>
There is so much on my mind at the moment regarding the interaction of Central Bank policies from all corners of the globe, plus a couple of other factors that the FED would not have let pass them by.

There are divergences of policies all over, and, I think Janet Yellen has a very interesting meeting to chair this week with her FED presidents, then, she has to face the press for what should be a very interesting Press Conference. I am of course making an assumption that the correct questions are put forth for her to answer during the press conference but I think the FED has some fascinating decisions to make this week in the face of recent events.

<span style="text-decoration: underline;">BANK OF ENGLAND:</span>

Mark Carney’s speech last Thursday has in my opinion set “the cat amongst the pigeons”. After George Osborne the UK Chancellor announced that he was giving the BOE more powers to limit mortgage lending to avoid a housing bubble, primarily in and around London, like many I thought that this would form the basis of Carney’s speech.

However, Carney is now a HAWK. He said that interest rate hikes are getting much closer, and could happen sooner than the markets anticipate.

The UK and the FED took rates to almost zero very quickly after the Financial Crash of 2008. Much has been spoken of the U.S. recovery and tapering by the FED to reduce it’s bond purchasing etc. by $10 billion per month. The UK economy is growing probably the fastest of the G7 and with Carney looking to raise rates sooner rather than later, will this give Janet Yellen the spur to increase tapering or announce that interest rates will soon be rising in the U.S. as well.

This makes you think...Dilemma number one.
<span style="text-decoration: underline;">THE EUROPEAN CENTRAL BANK:</span>

Monetary policy by the FED is tightening through tapering and will eventually announce a policy change to introduce raising interest rates. At the same time, the Eurozone is now committed to long-term low rates as the ECB attempts to get to grips with DEFLATION and a strong currency through easing. This divergence of approach will have an effect on the movements of currency without doubt.

Janet Yellen will have to play this hand very carefully indeed moving forward. Movements of currency “in flows and out flows” are measured very carefully and the dominance of the EUR/USD in the Forex markets will cause concern.

A weaker EUR means a stronger USD. This will affect many markets if correlations return, OIL and GOLD being two relationships that immediately spring to mind. But at the moment the chances are that we will have divergence across these relationships, due to the geopolitical situations of tensions around the globe.

This also makes you think…Dilemma number two.

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<span style="text-decoration: underline;">BANK OF JAPAN:</span>

Monetary Policy in Japan is clear, but, are the goals set out very clearly by the Japanese Prime Minister Shinzo Abe and the BOJ governor Kuroda actually being met…. are they even on target?

Volatility in the Nikkei and the direct relationship between the Nikkei and the JPY is very clear at the moment and there is a direct correlation of movement in either direction up or down. Without doubt reputations are on the line. The recent hike in sales tax has caused a blip in spending. Is the 2% inflation goal going to be achieved? At the moment it looks doubtful.

The BOJ has the ability to ease like we have never seen before to drive the Japanese economy to where the goals lie and where the reputations need the movements to end up.

If Japan acts strongly this will have a knock on effect all over and this will affect the USD. I suspect that the FED will always have an eye on Japan, whenever it changes monetary policy direction.

This also makes you think...Dilemma number three.
<span style="text-decoration: underline;">OIL PRICES:</span>

Central Bank activities aside, I strongly suspect that Oil is causing a big headache for policy makers.

As OIL prices increase, this places what is really an increase in taxes on consumers. If you are taxed more….you spend less….in a consumer driven economy like the U.S. (the biggest in the world), less spending by consumers effects many, many things. The main one to focus on is “Consumer Sentiment”, if these numbers start to fall showing lack of confidence this affects all businesses.

Additionally, as OIL prices go up so do the inflationary pressures and that usually leads to raising interest rates to try and control inflation. Raising rates places more pressure on individuals and adds to the chance of weaker “Consumer Confidence” numbers.

What does the FED think of here, increase tapering and raise interest rates?

This one really makes you think…. Dilemma number four.

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I think that this week’s FED meeting would be the one to be a “fly on the wall at”. There are so many new matters to consider, and whilst the FED will always say we act in the interests of the U.S. alone, it must take a worldwide view into consideration.

The bottom line is that we have the potential for direction in the Forex markets if the news releases are clear and strong giving the markets no uncertainty in policy. This Wednesday afternoon’s trading opportunity should be interesting to say the least.

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<strong>4. TRADER TOPICS:</strong><strong> </strong>

There is no article this week. I am still working on my Forex broker reviews and I hope to have these either next week or at the end of the month.

<strong> </strong>

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<strong>5. MY CURRENT LIVE TRADES:</strong>

I basically went into cash ahead of this weekend given the geopolitical news that was in the news.

<strong>FLASH TRADES:</strong>

I have no flash trades at the moment<strong> </strong>

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<strong>RADAR TRADES:</strong>

RT105
USD/CAD
Long
Cost Average: 1.0890
Stop Loss: 1.0840
Limit / Target: 1.1030
Weekly Closing Price: 1.0854
Position: - 36 pips

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<strong>FUNDAMENTAL TRADES:</strong>

FUN14
GBP/NZD
Long
Cost Average: 1.9800
Stop Loss: 1.9000
Limit / Target: 2.2350
Weekly Closing Price: 1.9519
Position: - 281 pips
(This pair is hedged again at -150 pips)

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<strong>6. TRADES THAT ARE ON MY RADAR:</strong>

The trade set-ups listed below are  placed with my brokers.

I basically went into cash at then of of last week given all the geopolitical news in the markets. It is my intention to ease myself gently back into trades again this week , however, do not expect plethora because of the FOMC. I may see a rush of intra-day pullback trades and these will be advised via twitter.

RT101
EUR/USD
Short
Entry at 1.3580
Stop at 1.3670
Limit 1.3000

RT108
NZD/USD
Short
Entry at 0.8750
Stop at 0.8825
Limit 0.8000

RT109
AUD/USD
Short
Entry at 0.9525
Stop at 0.9600
Limit 0.8500

RT110
AUD/NZD
Long
Entry at 1.0825
Stop at 1.0750
Limit 1.1350

Last Friday, in the DAILY FX POST I noted a few entry levels to try and establish long positions in GBP crosses. I want to give these a further examination at the beginning of the European session Monday. I will tweet my thoughts then.

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<strong>7. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</strong>

<strong>EUR/USD: Closing Price 1.3571.</strong> We are in a very tight trading range. Previous support now resistance at 1.3585 held very well last week and this is an area where I would look to short. In fact, last week my limit order at 1.3580 missed triggering by 1.5 pips. I see the range as 1.3502 support up to 1.3585 resistance. It is a difficult one to read at the moment although my bias is that the EUR/USD will fall. A breakdown below 1.3502 will signal the resumption of the downtrend from 1.3993, and the next target would be 1.3350 or thereabouts. However, if 1.3502 holds, the fall from 1.3676 would be seen as a correction of the uptrend from 1.3502 and then another squeeze to 1.3900 could still be on the table.

<strong>GBP/USD: Closing Price 1.6962</strong>. It looks like we have to test 1.7000 again. Whether we will do this pre FOMC I do not know. But this currency is now a buy on the dip approach in my opinion. 1.6920 would be a great place to go long, if we can get there and is good support and 1.7000 is resistance.

<strong>AUD/USD: Closing Price 0.9400</strong>. There is a very tight trading range at the moment for the Aussie. This is due to divergences within the way commodity currencies are reacting to the geopolitical issues. The current tensions are keeping the commodity currencies well supported. In addition the AUD is keeping up the highly over-valued NZD at the moment as well, despite the neutral stance taken by the RBA. Support is a t 0.9370 and resistance at 0.9440. I think that to really feel bearish on this pair we need to see a break below 0.9300.

<strong>NZD/USD: Closing Price 0.8652</strong>. Wheeler the dealer sure knows how to string the markets along. He increases rates and then says that exchange rates involving the NZD are too high and unsustainable. The RBNZ has cost me some money this year. I believe that we could see a test of 0.8700 as resistance and should that level break the 52-week high is at 0.8779. Do not rule this level out yet. Support is good at 0.8600.

<strong>USD/CAD: Closing Price 1.0854.</strong> Boring, boring, boring. Trade extremes for the range are 1.0815 to 1.0910.

<strong>USD/CHF: Closing Price 0.8997</strong>. I think this pair and its crosses could be very interesting this week. Watch the SNB press conference this Thursday. If the EUR starts to weaken the SNB may be forced to act to control currency flows. For now the range is 0.8910 to 0.9037.

<strong>USD/JPY: Closing Price 102.03</strong>. Boring, boring, boring. Support at 101.80 and resistance at 102.85.

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<strong>8. MAJOR TRADING PAIRS WITH LONGER-TERM TRENDS MATCHING:</strong><strong> </strong>

I have received a few emails from subscribers of the PREMIUM SERVICE asking me to place this in the WEEKLY FX DRIVE THRU. (I have tweeted it several times recently)

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;"><strong>LONG:</strong></span>

AUD/JPY
CAD/JPY
NZD/JPY

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

EUR/USD
USD/CAD
EUR/GBP
AUD/CAD
EUR/CAD
EUR/AUD
AUD/NZD
USD/NOK
USD/SEK
EUR/NOK
EUR/SEK
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<strong>9. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</strong>

SUNDAY: N/A.

MONDAY: AUD – Monetary Policy Meeting Minutes.

TUESDAY: EUR – German ZEW Economic Sentiment.

WEDNESDAY: USD – FOMC Statement and Press Conference.
WEDNESDAY: NZD – GDP.

THURSDAY: CHF – Monetary Policy Statement and Press Conference.

FRIDAY: CAD – Core Retail Sales.

<strong> </strong>

<strong>10. FINAL THOUGHTS:</strong>

The FOMC is the star this week when it comes to Forex news.

I just want to take this opportunity to say that last week I lost money on trades surrounding two very different news events, but these losses were limited due to the positioning of my stops: -
<ul>
	<li>The RBNZ, I could have avoided a big loss had I not tried to anticipate what I believed the RBNZ statement would say. Fundamentally, I was not that far off the mark but the stance taken by the RBNZ caught me off guard.</li>
</ul>
<ul>
	<li>The BOE move to increase rates caught me out but there was no way of knowing what was going to happen during the speech that Carney made.</li>
</ul>
On both trades whilst my positions were of 80% and 50% size, I had stops reasonably tight, and in line with my TRADING PLAN and my RISK MANAGEMENT tolerances. Had I not done this I would have been looking at huge losses given the monumental moves that followed both announcements.

It is so important to place stops. I have had a couple of discussions on email with PREMIUM SERVICE subscribers of late on the correct placement of stops.

News events can and always will from time to time cause you pain. Stops are there to help ease the pain of a loss a little; always use them.

Take care and good luck. Be careful with position sizes.

Scott Pickering
The Pip Accumulator
Sunday June 15th 2014

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

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