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

What a great week for trading. It was all about “Bennie and the Jets” this week aka Ben Bernanke and the FED Policy Committee.

Early in the week pre Wednesday, it was....do very little ....just prepare and then on Wednesday….launch….and off we go. My best week for profits in 2013 so far. When you consider it was just a 2.5 day trading week the opportunities were just fantastic. I hope all you guys made some pips also.

Moving forward, I think that we are about to change from a bullish to bearish sentiment. Whether this will be very fast, who knows, but I do think we are changing moods. Therefore, I believe that USD strength will be here for the next week or so, at least, so a directional market should be in play, which, is a rare treat so enjoy it while it lasts.

Several factors are also in play right now causing chaos that are affecting the markets at the moment. If you stand back and take a look at the wild swings and volatility the markets are actually in turmoil.

The double whammy of the unbalance caused by Shinzo Abe (Japanese Prime Minister) with his desire to hit a 2% Japanese inflation target by intervention in the Yen, causing bond yields to go mental, plus, Ben’s tapering (ending/reducing the FED monthly QE support to the U.S. markets) has the whizz kids of Wall Street running out to buy cover, not just in the financial sense but also in the toilet sense…sales of Immodium, Pepto Bismol and Charmin Ultra to name but three products are in short supply (in particular, around the NYSE and CME). If you also trade shares, these companies may be worth looking at as a potential buy.

There are many key levels with the currencies that I love to trade, the AUD/USD and NZD/USD plus the pair I hate to trade but seem to get suckered into the USD/CAD. All three pairs offer up some big moves, and, in addition the EUR and GBP look like they are now going to move much lower as well in the coming sessions.

It is exciting to trade at the moment…..but do not get too carried away. Always trade within your “Trading Plan” guidelines and your financial limits. With a trending market, this is definitely the time to enter small, add to profitable positions, and, move stops to break even, take profits off the table and let the remainder of your position size run.

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<span style="text-decoration: underline;"><b>2. MY VIEW ON THE NEWS SEEN FROM MY TRADING DESK:</b></span>
<p align="center"><span style="text-decoration: underline;"><strong>WHAT NEXT....NOW THAT BEN HAS DELIVERED?</strong></span></p>
Who would have thought it?

Prior to the two day FED meeting last Tuesday and Wednesday, the word “Tapering” was, without doubt, in financial circles, the most used word in any conversation. In fact, it is a relatively new word to be used in the financial area but I am already sick to death of it. The run up to the FED statement and Ben’s press conference on Wednesday was over the top with expectation, and a huge number of analysts talked down the fact that “Tapering” would be mentioned but in general terms, as per the previous press releases.

Well fair play, the man I note as “The most powerful man in the world”, who looks to have been told via an Obama TV interview that his tenure at the FED will NOT be renewed……stuck to the markets with a clear and unambiguous timetable with the reiteration of the details of the targets required to start tapering FED support.

The Fed chairman was crystal clear…Bond buying could be tapered this year and end completely by the middle of 2014. Very few people expected the FED to end QE so fast, never mind have Ben be so clear on the timing.

As I have already mentioned in my introduction, the effects of this on Wall Street in particular, was like taking a “Pacifier/Dummy” away from a crying baby. The equity markets have been bounding along for months, in the knowledge that this day would come. After the announcement that the Fed will not be there to hold the hands of Wall Street for infinity…confusion, panic, disbelief…all the usual Wall Street crap.

One piece of great fun for me after taking profits is spending a few minutes doing some inter-market catch-ups. There was no better way for me to do this than watching CNBC after Ben had finished his press conference, at the same time as setting up a few trades for the Asian session. I watched a re-run on the PVR of the CNBC reaction and how the presenters and their panel of invited “Bull traders” viewed matters. The fascination for me, the immediate responses were quite good on the whole as they accepted that the U.S. economy was improving and that the FED could not offer QE forever.

However, being the cynic that I am on such matters…. I knew that there would be a sting in the tail….I was intrigued.

So as I expected the sting came on Thursday and Friday......CNBC were back to their true colours as the equity markets nose-dived, they rolled-out the idiot guests that they endorse whose only comments are: -
<p align="center">“buy, buy, buy…
now is the time to buy…
we are going higher from here…
this is the bottom…
now is the time to get in, it’s pulled back enough”</p>
Come on, enough is enough…this TV station needs to be held accountable.

The presenters often talk about when is “Ma and Pa” going to fully re-invest in equities following the 2008 crash.

Well it sure isn’t straight after the day the Fed pulls the rug from under the equity markets. Credibility as a premier “First in Business” my a**.

Looking forward from here, I do not know what is going to happen……no-one does…..it is all a matter of opinion. I feel that the equity markets are going to dump, but, this is only my opinion.

Why do I feel this way?

After Thursday’s lows in the equity markets, there followed a pullback that was expected in the Asian and the European sessions. Then on Friday the Thursday lows were hit and breached. This is a very negative statement. What happened yesterday was key, even though we bounced off the lows it was nothing. Market bounces over the next couple of sessions will be critical. If we do not get other than shallow bounces, that is, no “Snap Back” rally……believe me……we will be heading much, much lower.

So far, my focus has been on the U.S markets. These points alone set us up, in my opinion, for a move much lower.

There are many other fundamental world factors playing towards USD strength as I look around the world.

We have emerging markets issues….. social unrest is now common place most nights on our TV screens. In addition, there are numerous reports in various social networking sites that money  invested in these countries is under threat and the investors will review and possibly bring their money back to a “safe-haven” and 90% of the time, this would be the USD.  As people buy dollars this immediately weakens the equity markets, and sends them lower.

BRAZIL: protesting over public transport issues, there were over one million protestors on the streets.
CHINA: - the economy is under-performing, its goals and the aspirations of it’s people are so high, they are not being met. There are also banking liquidity issues in the background.
INDIA: - the economy is now strained and civil unrest is growing as the country tries to come to grips with modernization.

Then add my favourite disaster area the Eurozone…..

GREECE: - unemployment, austerity and State TV closures. Now we hear that the socialist left party in the fragile coalition is pulling out of the coalition because of the ERT TV station closure. Are there elections on the way?
SPAIN: - austerity and unemployment.
CYPRUS: - banking issues and job cuts.
PORTUGAL:- austerity and unemployment.

All these factors relating to the countries above are going to weigh in and the benefactor is the USD.

As forex traders this spells out in font size 72, <span style="text-decoration: underline;"><strong>A GREAT OPPORTUNITY</strong></span>.

I am looking at the following levels in the USD majors: -

EUR/USD: A break of 1.3100 (a previous breakout position), and we are green for go to a lot lower. There is a very weird looking “Head and Shoulders” pattern in play and should we break 1.2800. It looks like sub 1.2000 for me if the measured move plays out.

GBP/USD: Sub 1.5000 is on the cards and if the EUR/USD breaks 1.2800, I think cable is heading towards 1.4300.

USD/CHF: Above 0.9400. We are heading to 0.9750 then a test of parity.

USD/CAD: After a break above 1.0500, I see a run much higher towards 1.100 and 1.1200.

AUD/USD: My revised target after we break lower through the critical 0.9160 is 0.8750. If equities really pullback I can see 0.8500.

NZD/USD: My target with this pair in sympathy with the AUD/USD is 0.7000.

Remember as well, my “Holy Trinity”… Gold is broken, the next stop is $1,100.00. If Copper breaks blow $3.00……I will short the “crap” out of the AUD/USD. Oil, if it breaks below $90.00….look out below.

We are in the zone for a huge/massive sentiment shift…get ready. I think that we are in for at least a 10% S&amp;P correction , if not  a 15% S&amp;P correction given the way the markets rose on bad data.

Trade sensibly, if my thoughts and opinions come into play there are thousands of pips available.

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

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

I have been in this trade with a small position for over 10 days. I have taken profits along the way, added to my position several times and managed this trade lower being quite cautious in position sizes. My fundamental views on the Eurozone have not altered and my limit targets are aggressive to say the least.
<p align="center"><b> </b></p>
<p align="center"><b>EUR/USD
Short
Entry/Cost Average: 1.3236
Stop Loss: 1.3236
Limit: 1.1850
Closing Price: 1.3121
Position Size: 20%
Present Position: +105 pips</b></p>
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The following four trades I entered late afternoon on Friday. They are very small, minimum risk deals. I will not be around tomorrow evening for the Asian open and will also miss the European session on Monday morning. I wanted to have a presence in the markets hence these very low risk trades<b>.</b><b> </b>
<p align="center"><b>GBP/USD
Short
Entry/Cost Average: 1.5429
Stop Loss: 1.5479
Limit: 1.4300
Closing Price: 1.5418
Position Size: 10%
Present Position: +8 pips</b></p>
<p align="center"><b>AUD/USD
Short
Entry/Cost Average: 0.9228
Stop Loss: 0.9278
Limit: 0.8550
Closing Price: 0.9219
Position Size: 10%
Present Position: +7 pips</b></p>
<p align="center"><b>NZD/USD
Short
Entry/Cost Average: 0.7748
Stop Loss: 0.7798
Limit: 0.7000
Closing Price: 0.7747
Position Size: 10%
Present Position: -1 pip</b></p>
<p align="center"><b>USD/CAD
Long
Entry/Cost Average: 1.0455
Stop Loss: 1.0405
Limit: 1.1200
Closing Price: 1.0455
Position Size: 10%
Present Position: Level</b></p>
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<b>4.<span style="text-decoration: underline;"> LOOKING AHEAD INTO THE NEXT 5.5 DAYS OF TRADING:</span></b>
<p align="center"><b><span style="text-decoration: underline;">THE MAJOR SUPPORT AND RESISTANCE LEVELS WITH THE USD MAJORS</span>:</b></p>
<b>EUR/USD: Closing Price 1.3121. </b>We are sitting at a crucial, key, major support level of 1.3100. (Do you think I am over emphasizing this?) Whilst there is a complex looking (rather oddly shaped) “Head and Shoulders” pattern on the Daily chart for this pair, the final arm extension is miles away, should the shoulder of 1.2800 give way. Now I do believe that we are on our way to test 1.2800 at some time in the near future. The measured move, which, must have many EUR bears placing huge supplies of Krug, and Bollinger on ice is sub 1.2000. On one of my broker’s charts I cannot get the display to tighten far enough to show the 1.1860 figure that I see as the measured move completion. I would not get too carried away at the moment but I am approximating here, I could be shy or bold by 50-60 pips or so. In any event, that number is for another blog. Immediate support and resistance to look at this week lies after 1.3100, then 1.3034. I feel as already stated, a confirmed break below 1.3100, and  we will be checking out 1.2800. Upside resistance should now be good at 1.3180 and then 1.3260…but do not hold your breath. If we do not  retrace back to 1.3180 Sunday/Monday…..we are going much, much lower in my opinion.
<a href="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/06/EURUSD-MONTHLY-220613.png"><img class="aligncenter size-large wp-image-1850" alt="EURUSD MONTHLY 220613" src="http://www.thepipaccumulator.com/blog/wp-content/uploads/2013/06/EURUSD-MONTHLY-220613-1024x571.png" width="1024" height="571" /></a>

<b>GBP/USD: Closing Price 1.5418</b>.<b> </b>We are sitting in the lower part of a key range that cable has been trading.  We broke the lower end on Friday but bounced back. Until we break - sit tight. Let the trade come to you. The EUR/USD this week will be leading. The cable range is 1.5380 to 1.5550.

<b>AUD/USD: Closing Price 0.9219. </b> Wowie…almost here we go. This is my favourite pair to trade. I need equities to really turn lower and correct and as one of my friends uses as his “catchphrase…”Happy Days”. We are sitting so close to major support that has held twice already. We need the S&amp;P to break lower for this support level to break in my opinion. 0.9160 is a big, big, big, big and I mean a big feck**g number. This gives way and my once seen by a few people of an “Armageddon” price target of 0.8750 could be on. Certainly, many analysts have been quoting 0.9000 as the objective set by the RBA. I have no idea what they have set, but in the crazy f***ed up interventionist world that we live in maybe it’s 0.8500 as the target for the AUD/USD. The weaker the better is the talk of the town right now by central bank officials.
The range is pretty clear 0.9160 to resistance at 0.9260. If pullbacks are shallow, you know the score………..lower we go. If it squeezes higher take it as a gift to short.

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NZD/USD: Closing Price 0.7747. </b>The Kiwi is my second favourite currency to trade, after the Aussie dollar. I love New Zealand as a country, it was our second choice country to live in after Canada following our move here from Spain. For that reason alone, I took a real serious interest in the country, its economics and obviously it’s wine!!
I love yer man Wheeler governor of the RBNZ. No bulls**t sort of guy, started very quietly in the job, was it last year or the year before, I can’t remember, but the guy is as straight a talker as anyone in the role he has. It’s the culture of the country, give me news without frills, do not dress it up, if it’s a “Pig” tell me it’s a ”Pig”. This approach for traders in Fx is clear and great to follow, the ‘no brainer’ approach is the best one to follow, actually, in all aspects of life, but in particular the Fx market. There is no QE here, no asset purchase facility......they (RBNZ) will intervene directly in the money markets if the NZD/USD strengthens too much. Therefore, take this as read if the Kiwi does not follow the AUD/USD down almost in sync, the RBNZ will help it along the way. To me this means, for the time being DO NOT long the NZD/USD. The New Zealand government wants a much weaker currency like most other countries. They follow the lead set by Australia. What are the targets? If the AUD/USD is just 0.9000, the NZD/USD is 0.7500. My Kiwi “Armageddon” number is 0.6500.
For the immediate time we need to get below 0.7700 to have 0.7500 in our sights. Upside resistance is 0.7800. Like the Aussie, if this pair squeezes to 0.7800, take it as a gift to short up there.

<b>USD/CHF: Closing Price 0.9344. </b>Not really following this pair at all at the moment. Because of the Yen situation and troubles in the Eurozone, I fear this currency is a “safe-haven” European option, and as a result it could strengthen at any time and the inverse relationship it has with the EUR/USD is thrown out of the window. Looking at charts the range in play which, has capped moves up and down is 0.9185 to 0.9400.

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USD/CAD: Closing Price 1.0455. </b>Finally we are moving. Now this pair is one of my leading indicators,and, although in recent times, it has been trapped in a tight range not moving much at all….here we go. I think if we scale through 1.0500  and head higher to where the air is thin and difficult to breathe and we will require oxygen to breathe normally. Chart extensions of 1.100 to 1.1200 are in my sights. This week the range to keep in mind is 1.0300 support (which looks hard to scale back to) to 1.0525, then 1.0660.

<b>USD/JPY: Closing Price 97.88. </b>What do you do with this pair? There are so many unknowns, so many possible outcomes. We know that Abe is determined at all costs to weaken this pair. Therefore, one would expect given the fact that USD are being bought everywhere the USD/JPY would fly through 100.00. But, we have the Nikkei sell off and the U.S. equity markets coming under severe pressure. The market turmoil plays on the JPY and all crosses the most. The big range is 93.50 to 98.50. The immediate range is 97.00 to 98.00. Personally, I am staying away from the JPY and looking elsewhere.

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

This week is a difficult week for me on news events. Not a lot takes my fancy at all.

TUESDAY: USD – Consumer Confidence.
WEDNESDAY: NZD – Trade Balance.
FRIDAY: CAD – GDP.

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

Not much news coming up that really takes my fancy. That does not mean that I will not be trading. The equity markets this week will gives us (Fx traders) our lead on how to trade.

As I have stated already, we are in the middle of a market sentiment shift, and, whilst there are many imponderables, such as China, Japan and the Eurozone, all of these I do feel play into the hands of a strengthening USD.

As always trade smaller with wider stops as the roller-coaster ride of volatility is set to continue, although now, I am more hopeful that we will see a trending market for a while. Let’s hope the trending market stays, as it is a safer place to trade within.

Take care and good luck,

Scott Pickering
The Pip Accumulator
Saturday 22nd June 2013.

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