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

The Eurozone circus carried on in style over the last 7 days. I still believe that the best is yet to come. We obviously have, despite all the political back tracking, a template for "Bail ins" rather than "Bail outs" to keep bank liquidity at acceptable/minimal levels. We shouldn't really be having any bank issues in the Eurozone, based upon the last set of Eurozone bank stress tests. They (the tests) were seen at the time as a bit of a joke and not real....those chickens have come home to roost, lets be frank here, nearly all Eurozone banks passed an end of the world scenario. Now we have bank rumblings in Spain, and  Italy in addition to the  Cypriot banks, and remember not one of the emergency world ending conditions from the stress tests are in sight. The Eurozone just seems to stagger from one f**k up to next f**k up.

Trading this past week was great fun, although oversold conditions came into play on the EUR/USD and GBP/USD and the downward trend was suspended. It was great to see a GBP/USD pullback to 1.5200, this is a great area to consider re-shorting when the market returns after the Easter break.

The grind higher in the S&amp;P and Dow Jones has been relentless, and, now that we have hit multi year highs I am thinking more than ever that we will now be prime for a pullback. The AUD/USD is already weak, although the RBA interest rate and press conference due early next week may be influencing matters in this pair as a cut is expected. Whether its at this meeting is debatable. However, a cut and an equity market pullback could see a move towards parity once again with this pair. I am also conscious that with Copper toying with $3.40, this could also send the Aussie lower should a break below $3.40 happen.

This coming week will be a fascinating one, there are central bank meetings, rate decisions and U.S. non farm payrolls. Do not forget the Eurozone saga as this will also add some spice to trading.

I am looking to short the EUR/USD, GBP/USD and the AUD/USD if conditions deteriorate and can achieve my target entry levels, and, I am looking to get long the USD/CHF and USD/CAD. With exotic pairs, the EUR/AUD and GBP/AUD both look prime for big moves to the long side if the pieces in the jig-saw start to fit together.

&nbsp;

<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>ANOTHER CAN GET'S KICKED DOWN THE ROAD......</strong></span></p>
<p style="text-align: left;">The biggest non event of 2013 took place last Thursday.</p>
<p style="text-align: left;">Cypriot banks re-opened but  banking services were operating at less than 5% of the norm. You could not withdraw more than Euro 300, not allowed to wire monies anywhere etc etc. Therefore, the expected lines of angry account holders and the anticipated run on people withdrawing all their deposits was not allowed to happen. Eventually though, controls will be removed and guess what..........many people will be sleeping a few inches nearer to heaven as they stuff their mattresses with cash following total withdrawals. Petty thieves and burglars from all over Europe are booking flights now bound for Nicosia in the coming months, as they will seize the cash in homes not in banks initiative.</p>
<p style="text-align: left;">You have to hand it to the Eurozone politicians, they create impossible situations through their mis-management, and then, they all jump into JCB's and  dig bigger holes that they cannot get out of resulting in a crisis. Politicians are not crisis managers, they are in the main inept at such things.....Politicians are most comfortable when they are attributing blame to opposition parties on domestic issues. The Eurozone format adds a level to which there is no training given to Eurozone politicians and this is 100% evident  in the way solutions to the Eurozone circus are never managed, rather put off....hence my blog title this week... "Another can get's kicked down the road". The only effective management in the Eurozone to me appears to be by the ECB under Mario Draghi. A huge amount of his excellent work in restoring the single currency stability recently has been undermined by the numpty politicians.</p>
<p style="text-align: left;">So, Cyprus survived because nothing was allowed to happen. There will be a cash exodus though as soon as controls are lifted. Do not believe it will not happen as there is  already anxiety in Spain, Greece, Italy, Portugal and Ireland........and now even in Slovenia where bank deposits which will be extracted, before the word 'template' is mentioned again. Anywhere where there have been issues in the past, it will now no longer be tax payers to bail out banks it will be depositors to bail in! At this stage those depositors with 100k or less allegedly protected by the Eurozone bond are safe, but if you recall with Germany's blessing this was not the case in Cyprus when the "Bail in" was first announced. Nothing is safe it is all fair game. The phrase "It's as safe as your money in the bank" means nothing, and, it should be remembered.</p>
<p style="text-align: left;">Quite frankly markets and depositors feed on stability. The Eurozone has burst that balloon. There is very little that will be believed by depositors as the politicians would tell you the grass is blue and the sky is green if they thought it would calm feelings. There has been a breach of trust..on the U.S. dollar bill it says "In God we Trust". In the Eurozone if it said on Euro bank notes "In Angela Merkel and the German Parliament we trust", everyone would be betrayed, as  they were quite prepared to let Cyprus hang out to dry and it back fired big time.....the Dutch and the Finns are template orientated. The man on the street as a result.... trusts no bank, no politician.</p>
<p style="text-align: left;">Trading this situation has people in different camps.</p>
<p style="text-align: left;">The EUR/USD for me is going to test 1.2000 and maybe lower before this shambles plays out. A worldwide equity market pullback/correction will only weaken the EUR further.</p>
<p style="text-align: left;">Basically, until, and, quite frankly I do not believe that this will ever happen, but until politicians actually write down an action plan in the Eurozone with designated responsibilities by politician, given full responsibility to achieve the goal and at the same time telling those politicians without responsibility to keep their mouths shut,  I believe  the Eurozone will drift from one cock up to the next.....nothing will get sorted.....voters will eventually remove the ineffective domestic politicians,  decide that Austerity has never worked  and the debt contagion will rise again.</p>
<p style="text-align: left;">Medium term and longer term I see no good news for Europe. There are no strong leaders. The anti austerity vote is on the rise, hardly surprising, look at Italy, Greece and Spain.</p>
<p style="text-align: left;">Regarding "Kicking cans down the road. "My question is how many cans were in the box? Was it a 6 pack, 12 pack or 18 pack.....given the Eurozone performance they probably went to Costco to buy a 48 pack to cover the well known ineptness of their management.</p>
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>3. MY LONG TERM TRADES:</strong></span></p>
<p style="text-align: left;">I have no long term trades at this time.</p>
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>4. LOOKING INTO THE COMING WEEK - THE KEY SUPPORT AN RESISTANCE LEVELS WITH THE USD MAJORS:</strong></span></p>
<p style="text-align: left;"><strong>EUR/USD: Closing Price 1.2821.</strong> My longer term view is that we are going to test lower levels with this pair. We had a short squeeze of shorts on Thursday last week but that never even tested 1.3000 much. If we break below 1.2750, which to me looks on the cards, I think we go for 1.2635. Long side resistance is 1.3050-1.3100.</p>
<p style="text-align: left;"><strong>GBP/USD: Closing Price 1.5213.</strong>  From here to 1.5250 I think is a great area to go short with stops around 1.5280. This should offer a good risk reward trade as we know the topside level. Support will be 1.500 and then 1.4900. Longer term I am bearish this pair...the UK is down the crapper. The only positive to bear in mind though is the fact that cable could be bought as people bail out of the EUR. I call that frying pan to the fire given the state of the UK.</p>
<p style="text-align: left;"><strong>AUD/USD: Closing Price 1.0419.</strong> We sit on major support of 1.0400-1.0415. Copper and Equities I believe are heading lower and given the fact this pair didn't participate in the recent rise in U.S. equities one would expect it to cave in should equities pull back. A few weeks ago, I blogged 0.9800 was a target that I had in the frame. It's still there an if the RBA cut rates this week, coupled with a drop in Copper and Equities falling back we could get there quicker than you would think. The range is 1.0350 to 1.0575.</p>
<p style="text-align: left;"><strong>NZD/USD:Closing Price 0.8367.</strong> This pair is holding up very well, which means to me a bigger fall when it starts. I am looking to short at 0.8400 if we get there targeting 0.8000. Initial range is 0.8300 to 0.8400.</p>
<p style="text-align: left;"><strong>USD/JPY: Closing Price 94.23.</strong>  A break below 93.80, which I tweeted during the week is the key support level. Resistance is at 95.00.</p>
<p style="text-align: left;"><strong>USD/CHF: Closing Price 0.9492.</strong> The Eurozone cash crisis/contagion will have a lot to do with this pair and how it behaves. I would actually ignore it for the time being until the controls in Cyprus and the political fallout settles down an some sort of resolution to the crisis is sorted. Cash movements in Europe will be increasing in the short term and the Swiss government reaction will be important to follow. The floor of 1.2000 in EUR/CHF will no doubt be defended, but the threat of charging for deposits in Swiss banks will raise it's head once again. This pair may get volatile. The range is 0.9400 to 0.9550.</p>
<p style="text-align: left;"><strong>USD/CAD:Closing Price 1.0171.</strong> The range is 1.0100 to 1.0250. If you see this pair challenging the range highs I would not be short USD.</p>
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>5. MAJOR NEWS EVENTS THAT INTEREST ME THIS WEEK:</strong></span></p>
<p style="text-align: left;">SUNDAY - CNY - Manufacturing PMi.</p>
<p style="text-align: left;">MONDAY - AUD - RBA Rate Statement and Interest Rate decision.</p>
<p style="text-align: left;">TUESDAY - GBP - Manufacturing PMi.</p>
<p style="text-align: left;">WEDNESDAY - GBP - Construction PMi.
WEDNESDAY - USD - ADP Non-Farm Payrolls.
WEDNESDAY - AUD - Retail Sales.
WEDNESDAY - JPY - Monetary Policy Statement and Overnight Call Rate.</p>
<p style="text-align: left;">THURSDAY - JPY - BOJ Press Conference.
THURSDAY - GBP - Services PMi.
THURSDAY - GBP - Bank Rate, Asset Purchase Facility and MPC rate Statement.
THURSDAY - EUR - Interest Rate Decision and Draghi Press Conference.
THURSDAY - USD - Bernanke speaks.</p>
<p style="text-align: left;">FRIDAY - USD - Non Farm Payrolls
FRIDAY - CAD - Unemployment rates, Trade Balance and Ivey PMi.</p>
<p style="text-align: left;"><span style="text-decoration: underline;"><strong>6. FINAL THOUGHTS and CLOSING COMMENTS:</strong></span></p>
<p style="text-align: left;">The week ahead is the type of week that could have the potential to blow trading accounts apart. Uncertainty and confusion dominates in the Eurozone and the U.S. markets are so heavily supported by Ben and the FED that it acts in isolation purely focussed on setting new highs. When this bubble bursts the likes of CNBC will be lost at sea and it may as well shut down as they have no idea how to present a declining market and completely ignore the fact that you can make money in a declining market. Maybe now that new highs have been set, this week will be the one to start the pullback....who knows.</p>
<p style="text-align: left;">I hate to write the word "Crossroad"........but we could be at yet another one.</p>
<p style="text-align: left;">With soooooooooooooooooooooooo many big news events this week I am expecting a ton of volatility coupled with late nights and early morning trading.</p>
<p style="text-align: left;">Trade smaller positions, with stops that can cope with big swings in price.</p>
<p style="text-align: left;">Good luck,</p>
<p style="text-align: left;">Scott Pickering
The Pip Accumulator
Saturday March 30th 2013.</p>