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<strong>1. INTRODUCTION:</strong>

A very interesting trading and news week

The tensions in the Ukraine created new low levels of diplomacy extremes between Russia and the U.S. At times, the verbal exchanges reminded me of an old Monty Python sketch but I do not want to create humour out of this serious situation. However, for a serving Secretary of State to say to his Russian counterpart and Putin, “carry on and it will have serious, serious, major implications”, is Pythonesque. It also reminds me of Eddie Murphy in Beverley Hills Cop telling his boss that he was going deep, deep, deep undercover!

That aside, the USD/JPY and USD/CHF are reacting to the on-going developing situation as the Mexican standoff moves to a more threatening stage. It does look like it could be a double whammy for those who are on the “Must long the USD/JPY” trip. Recent gains in the S&amp;P have not been matched by the USD/JPY and this usually says that if equities really commence a pullback or deeper correction the USD/JPY will drop faster than usual on the back of the fact it never moved up in line with equities when they were in rally mode. Should this be case, I could be short JPY for a while as many JPY pairs have potentially big moves ahead of them to the short side. Add to this worldwide unrest and the “safe-haven” is back in play.

The bottom line is “THE CHOP FEST CONTINUES”

I am currently live in 15 trades….the vast majority of them are very small trades. I am trying to establish core positions from which to base longer-term trades from. I have just 2 trades that I would call close to full size, USD/CAD long and NZD/USD short, plus a mid level short trade in the AUD/USD. I am not worried about the current positions of my current live trades; my stops are well within my RISK MANAGEMENT and my TRADING PLAN guidelines. The only thing that is bugging me are the ranges that we are now stuck in. We really require a catalyst to jump-start the market. This would not only benefit (hopefully) my larger trade sizes, but would also in establishing my core positions. Until this happens, I have just have to be patient and wait.

This coming week we have some FED speak with Yellen, an FOMC statement and both ADP and Government Non-Farm payrolls. Hopefully these 4 news items between them will get the market moving. But having just written this, I think I may have said something similar last month.

If you are a new trader, please note, and I re-iterate that 83% of the live trades that I am currently trading are small positions. None of my trades are full-size. If you are a PREMIUM SERVICE subscriber you do not have to copy every trade that I am live with, the only thing I ask is that you manage your position sizes, and trade within your trade plan risk tolerance levels. The PREMIUM SERVICE website has examples of how to put together a TRADING PLAN and additional training material on the website shows you the content to add to your TRADING PLAN and why.

This is not a time to get carried away when you think that there is a breakout or breakdown. There are so many false moves right now, which is typical of a range bound marketplace.

I welcomed a further 4 new PREMIUM SERVICE subscribers during the week. I want to mention again, that the vast majority of my PREMIUM SERVICE subscribers are happy just to receive the DAILY FX POST and this weekly blog and are not interested in Twitter. I have absolutely no problem with this approach at all, but please bear in mind there are only 24 hours in a day, I need sleep from time to time so I cannot answer emails or SKYPE messages immediately, nor do I look for Twitter conversations.

I have to research, publish set-ups, trade myself, manage trades, tweet, blog and write additional articles for the PREMIUM SERVICE version of this blog, plus develop Broker relationships for the future as the PREMIUM SERVICE develops. In addition, I am also writing for LINKEDIN as well to several Forex groups. If it takes me an hour or so to respond to questions I apologize. I promise you I am busy but I will get back to you.

For the new traders to the PREMIUM SERVICE my TRADER TOPIC discussion this week is “LIVE ACCOUNT versus DEMO ACCOUNT”, I hope that you will find this useful.

I had 3 responses to my webinar suggestion last week, so that project has been shelved due to lack of interest.

Finally, the PREMIUM SERVICE income is still moving forward in these challenging trading times so I am very happy with that. I am slightly behind my personal income objective, but not too far. I have been taking reduced profits as I have been reducing my trade sizes and as a result my income per trade is lower than my target. However, even with a modification in trading style this month has been a tremendous month all things considered: -

Single micro lot trades on the 44 closed trades this month = $147.30
Single mini lot trades on the 44 closed trades this month so far =$1,473.00
Single standard lot trades on the 44 trades this month so far = $14,730.00

I have already written a training topic called “TRADING WITH A FLEXIBLE MINDSET” for next weeks PREMIUM SERVICE blog. This is something that I deeply believe in and I have been using this over the past 8 weeks. In March, at the beginning, I found the transition in the way that the market behaved very difficult to get to grips with, however; recently I have come to terms with a slightly revised trading strategy that has produced the goods. The written section on mindset flexibility will be in next week’s blog for the PREMIUM SERVICE subscribers.<strong> </strong>

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<strong>2. THE VIEW FROM MY TRADING DESK:</strong>
<p style="text-align: center;"><strong>CORRELATIONS DO MATTER…ESPECIALLY THE USD/JPY &amp; SPX</strong></p>
Correlations do matter and, yes, they are important factors to consider when researching a trade, establishing the entry, the risk and the profit potential. However, at times traders have to trade when correlations are off, out of sync, or just not playing ball.

Right now, one of the best correlations in the market is not playing…the USD/JPY and the S&amp;P (SPX index S&amp;P 500).

Over recent weeks there has been market volatility and turmoil not seen for a long, long time. The S&amp;P rose 65 points in a day recently, then sold off 75 points and bounced back 55 points. These are not normal market conditions and these intra-day moves in the S&amp;P way off the normal.

This past week, we saw the S&amp;P rally to highs from a low retracement base that had been formed about two weeks ago that had been formed. From the low to the high point was about a 75-80% retracement. During the same period the USD/JPY managed just under a 50% retracement. The correlation is now off, for years this has been a parallel relationship. What is this telling me?

It is telling me that the S&amp;P is going to move downwards and that the USD/JPY is ready to move much lower.

It may take a while to do as one has to consider the JPY cross-rates in all of this: EUR/JPY, GBP/JPY, AUD/JPY, NZD/JPY, SEK/JPY, CAD/JPY and CHF/JPY to name the most popular.

The EUR (single currency) is incredibly strong right now but should the ECB and Draghi finally extract “the digit” and execute a full on QE (Quantitative Easing) programme with bank negative deposit rates, this would fuel the fire lower.

The Commodity currencies are under pressure already from their central banks (RBA, RBNZ) constantly quoting that exchange rates are at historic highs and cannot stay there for long. Therefore the downside pressure on the AUD and NZD is there. It is only equities that are holding them up.

The Swedish Central Bank is fighting deflation and the SEK is under pressure. The SEK is approaching an inflection point against the EUR and the USD, and if it breaks the SEK/JPY is a prime candidate for a move lower.

Should the USD/JPY fall the commodity crosses will follow, AUD/JPY, NZD/JPY CAD/JPY and SEK/JPY.

What is needed to start the process?

Just a little bit of what drives the markets…this time not greed but FEAR.

FEAR would hit the GBP currency very quickly as the UK is a heavily based Financial economy and if FEAR hits the GREEDMONGERS behind their desks, the “Pen Pushing”, “Desk Sucking” “Jotter-blotters” only know one course of action...that is sell and panic, “get me out at any cost, but look just get me out”.

The Ukraine / Russian tensions could be the catalyst. Rhetoric from some of the spokespersons involved is desperate to say the least, World War III has been introduced into the dialogue, and it’s not pretty.

The ECB may go into full-on QE.

Cross-rate effects are important, in particular if the GBP and EUR were primary candidates to influence the JPY because of their relationship to the US dollar index.

Everything is linked…it just needs one move to set the ball rolling.

Correlations do matter and this one between the USD/JPY and SPX is a biggie and one that you have to seriously look at for the ramifications of its divergence.

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<strong>3. THE PREMIUM SERVICE:</strong>

I make several references to the PREMIUM SERVICE during this blog. The reason for that is that the PREMIUM SERVICE blog is more detailed and contains more information that the free WEEKLY FX DRIVE THRU version.

The PREMIUM SERVICE is a subscriber only service that provides my subscribers with the following: -

THE DAILY FX POST – this is a daily blog that goes directly to the secure subscriber area of the my website. This daily blog contains a brief overview of my thoughts each day on major FX news and reviews of key economic data. It also has trade set-ups for trades that are on my radar. I provide set ups for trades based upon three styles of trade, FLASH, RADAR or FUNDAMENTAL. This goal of this daily blog is to set traders up with a thought process for the day.

TWITTER – an exclusive protected twitter feed. This adds to the DAILY FX POST throughout the following day and night with trade set-ups, updates and my thoughts on the market as it moves. If trades come into play I tweet them as my chart analysis is completed.

THE PREMIUM SERVICE BLOG – This is a more comprehensive review of the week just gone and the week ahead. It includes training sections and RADAR trades plus on going performance reviews of existing trades and my thoughts moving forward.

THE PREMIUM SERVICE SUBSCRIBERS ONLY WEBSITE – This holds details of all trades, whether FLASH, RADAR or FUNDAMENTAL. Excel spreadsheets analyse the profit / loss performances all current trades and I also measure the year to date performances. The website also includes several sections containing training materials that are being added to weekly to provide traders with a comprehensive library of information. In the future, Webinars will be added and I am looking into a TRADER’s CHATROOM option, which would take the PREMIUM SERVICE on-line capabilities to the next level.

If this is something that interests you. If you go to the main website at <a href="http://www.weeklyfxdrivethru.com">www.weeklyfxdrivethru.com</a> on the welcome page on the top left you will see headings such as PREMIUM SERVICE, SPECIAL OFFERS and SIGN-UP all of these contain further information about the PREMIUM SERVICE and how to subscribe.

<span style="text-decoration: underline;"><strong>There is now a low cost trial option of $20.00 for 4 weeks membership</strong></span>

Below there is a copy of the TRADING SUMMARY that PREMIUM SERVICE subscribers receive plus they have access to excel spreadsheets that detail trade by trade. These are in the PREMIUM SERVICE section of my website.<strong> </strong>

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<strong>4. THE PREMIUM SERVICE - TRADING SUMMARY:</strong>

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<strong>RADAR, FLASH and FUNDAMENTAL TRADES</strong>

<strong>APRIL 2014 and YEAR to date:</strong>

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.

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<strong>RADAR TRADES – APRIL 2014…TO DATE:</strong>

<strong>PROFITS FROM SINGLE LOT COMPLETED RADAR TRADES:</strong>

1 x MICRO-LOT:

12 trades at $0.10 cents each = $1.20 risk for $38.80 profit.

1 x MINI-LOT:

12 trades at $1.00 each = $12.00 risk for $388.00 profit.

1 x STANDARD LOT:

12 trades at $10.00 each = $120.00 risk for $3,880.00 profit.

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<strong>FLASH TRADES – APRIL 2014…TO DATE:</strong>

<strong>PROFITS FROM SINGLE LOT COMPLETED FLASH TRADES:</strong>

1 x MICRO-LOT:

28 trades at $0.10 cents each = $2.80 cents risk for $98.70 profit.

1 x MINI-LOT:

28 trades at $1.00 each = $28.00 risk for $987.00 profit.

1 x STANDARD LOT:

28 trades at $10.00 each = $280.00 risk for $9,870.00 profit.

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<strong>FUNDAMENTAL TRADES – APRIL 2014…TO DATE:</strong>

<strong>PROFITS FROM SINGLE LOT COMPLETED FUNDAMENTAL TRADES:</strong>

1 x MICRO-LOT:

4 trades at $0.10 cents each = $0.40 cents risk for $9.80 profit.

1 x MINI-LOT:

4 trades at $1.00 each = $4.00 risk for $98.00 profit.

1 x STANDARD LOT:

4 trades at $10.00 each = $40.00 risk for $980.00 profit.

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<strong>COMBINED FLASH, RADAR AND FUNDAMENTAL TRADES PROFIT PERFORMANCE</strong>

<strong>APRIL 2014…TO DATE:</strong>

TRADING MICRO-LOTS:

44 trades at $0.10 cents each = $4.40 risk for $147.30 profit.

TRADING MINI-LOTS:

44 trades at $1.00 each = $44.00 risk for $1,473.00 profit.

TRADING STANDARD LOTS:

44 trades at $10.00 each = $440.00 risk for $14,730.00 profit.

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<strong>COMBINED FLASH, RADAR AND FUNDAMENTAL TRADES PROFIT PERFORMANCE</strong>

<strong>TOTAL 2014…SO FAR:</strong>

TRADING MICRO-LOTS:

184 trades at $0.10 cents each = $18.40 risk for $350.80 profit.

TRADING MINI-LOTS:

184 trades at $1.00 each = $184.00 risk for $3,508.00 profit.

TRADING STANDARD LOTS:

184 trades at $10.00 each = $1,840.00 risk for $35,080.00 profit.

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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>5. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</strong>

<strong>EUR/USD: Closing Price 1.3833.</strong> The past week has the ECB and Draghi talking up the rhetoric on the single currencies continued strength but not DEFLATION. QE and negative overnight ECB deposit rates have been talked about again. This has contained the EUR/USD to 1.3850. I was hoping for another run at 1.4000 to add to my existing short. Had the pair made this run I would imagine that Draghi would be wetting his pants desperate to get on the news wires once again to verbally intervene. So the next ECB Press Conference will be eagerly awaited and the rumours ahead of it at fever pitch. For now we are trapped in a tightening range 1.3750-1.3850.

<strong>GBP/USD: Closing Price 1.6793</strong>. I hate this pair at the moment. A few of my subscribers have tried getting short again the double / triple top whichever way you look at the charts….all to no avail. This pair just will not cave in and retreat back to the 1.6400 – 1.6500 area. It is well supported by the cross-rates, in particular, the GBP/AUD and GBP/NZD as they have been elevated of late and although not the full reason, these have been partially responsible for holding up the GBP. The other reason is the parallel relationship with the EUR. The EUR has not fallen so cable won’t either. I am looking at support at 1.6760 and resistance at 1.6840.

<strong>AUD/USD: Closing Price 0.9267</strong>. The RBA stated once again that exchange rates are at historic highs and ever since there has been pressure on the AUD/USD. Unfortunately it has held up primarily because many traders and institutions are long trying to play out a measured move to 0.9500 on an inverted head and shoulders pattern. This is now invalidated and the pair seems to be ready to accept the fall. I am short looking to add below 0.9200.

For now support is at 0.9235 and resistance at 0.9320.

<strong>NZD/USD: Closing Price 0.8574</strong>. One of my current largest trades right now is short the NZD/USD. There is huge support at 0.8550. If this gives way there are several trades and trade amendments due as per recent data in the PREMIUM SERVICE. Resistance is good at 0.8610.

<strong>USD/CAD: Closing Price 1.1038.</strong> My other large position is long the USD/CAD. Whilst I am not concerned at present levels, as long as we are above the multi-year trend line support at 1.0850, trading the “loonie” is always fun. We are trying to break out of a tight range maybe this week will be the time. I have high hopes of mucho $$$ with this trade. For now however the immediate range that interests me is 1.0970 to 1.1060

<strong>USD/CHF: Closing Price 0.8813</strong>. I am a nervous long with this pair, but my position size is small. Should tensions spill in Ukraine / Russia this is the European safe haven. We have held 0.8800 very well under several threats of late. We are once again above 0.8800. Key support should 0.8800 give way is at 0.8698 / 0.8700 and resistance is at 0.8875.

<strong>USD/JPY: Closing Price 102.18. </strong>I have made several references to this pair throughout this blog. Not wanting to bore you with it all, all over again. Support is strong at 102.00 below there I suspect stops are between 101.80 and 101.90. If they get taken out in a huge fall, the next big support is 101.00. That gives way to - hello 100.00. Resistance is good at 102.80.

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<strong> </strong>

<strong>6. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</strong>

SUNDAY: N/A.

MONDAY: N/A.

TUESDAY: JPY – BOJ Press Conference and Monetary Policy Statement.

WEDNESDAY: USD – ADP Non-Farm Employment Change.
WEDNESDAY: CAD – GDP.
WEDNESDAY: USD – FOMC Rate Statement.
WEDNESDAY: CNY – Manufacturing PMi.

THURSDAY: USD – FED chair, Janet Yellen speaks.
THURSDAY: AUD – PPi.

FRIDAY: USD: - Non-Farm Employment Change and Unemployment Rate.

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<strong>7. FINAL THOUGHTS:</strong>

There are some high profile news events this week that should get the markets moving along. We are still sitting in ranges at the moment in many different markets so unless the high profile news moves us, we could be no better off than we are right now. So this week you have to be ready for false breakouts and false breakdowns. There are so many inflection points close by in equities, bonds and the Forex markets, it is really no wonder that we have been in a chop fest for quite sometime.

The only thoughts that I can add are, that it is the same for everyone. Everyone looks at the same charts as we do day after day and I have no doubt that they are equally frustrated by the ranges that we are currently stuck within. The key is to be lighter on position sizes and ready to move. With this in mind we have to watch our lead indicators: -
<p style="text-align: center;">GOLD</p>
<p style="text-align: center;">COPPER</p>
<p style="text-align: center;">WTi Crude Oil</p>
<p style="text-align: center;">U.S. 10-Year Treasury</p>
<p style="text-align: center;">S&amp;P</p>
<p style="text-align: center;">AUD/USD</p>
<p style="text-align: center;">USD/CAD</p>
<p style="text-align: center;">USD/SEK</p>
<p style="text-align: center;">And</p>
<p style="text-align: center;">USD/JPY with 6J index</p>
By watching these we will get a heads up, if they all follow suit and correlate the way they should we will get a move we want. If they fail to correlate this is what can cause a false breakout or false breakdown.

Do not be complacent in any aspect of your trading at this time. You should only trade within your TRADING PLAN guidelines as per the examples I have written about and posted to the PREMIUM SERVICE trading essentials section of the website. You should at this time, trade smaller position sizes with stops in place that are within the guidelines of your TRADING PLAN. If my stops are too wide for you, reduce your position sizes to stay within your TRADING PLAN guidelines.

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

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Scott Pickering
The Pip Accumulator
Saturday April 26th 2014.

EMAIL / FOLLOW ME AT:

drivethru@weeklyfxdrivethru.com
Twitter: @pipaccumulator
Google+/scottpickering

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