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

<b></b>The title of my blog last week was: -  “THE JPY WILL SOON DICTATE THE MARKET DIRECTION”. It looks like it will have the big say in the markets direction, however, I was focused on it breaking lower through support at 97.00 not breaking higher through resistance around 99.00-99.20. The pair is now just below the triangle resistance line on the weekly chart  with its close this week at 98.66 and one small push higher may see it break through. As a forex trader you have be a lot things, but being flexible is probably one of the major characteristics. On a personal note though, I am disappointed that I did not get the opportunity, so far that is (never say never), to enter the USD/JPY long around 95.00.

The big news in the week just gone was the FOMC statement. Following which, the market interpreted the release completely different than the earlier release yet it was only one line different in real terms from the statement released last month. Talk about a fickle market?

In any event, it is what it is, and, the EUR/USD got smacked, good style. It appears that we may have seen the highs in this pair at 1.3830. We now trade over 300 pips lower and there are now calls for a single currency interest rate cut.  These calls for the rate cut emanated from the release of continued poor employment statistics for the Eurozone (that are still in excess of 12% and at record highs) and in addition dreadful inflation figures for the Eurozone both sets of data were released the day after the FOMC.

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<b><span style="text-decoration: underline;">2. THE VIEW FROM MY TRADING DESK:</span></b>
<p align="center"><b><span style="text-decoration: underline;">THE EURO IS ABOUT TO OFFER SOME INTERESTING TRADING OPPORTUNITIES AS THE CONTINUED EUR/USD DECLINE APPROACHES 1.3450; PLUS WE HAVE A DRAGHI PRESS CONFERENCE ON THE HORIZON JUST FOR GOOD MEASURE AND ADD EXTRA SPICE</span></b></p>
The EUR/USD is dropping nicely towards a key level of support at 1.3450. It is very oversold at the moment and usually this means that a period of consolidation should be around the corner. Having just written that, if you recall when the USD/JPY was on the “Abe” rampage earlier this year from 85.00 to 105.00 it was for most of the time over bought and that didn’t matter too much. I do think though we should bear the oversold conditions in mind. It just cannot keep straight lining lower.

The support level in the EUR/USD at 1.3450 was the breakout level from a previous FED meeting and for days/weeks following contained price movements. As we trade towards this level there are options available in the EUR across the board not just the EUR/USD but also the cross-pairs EUR/CAD, EUR/AUD, EUR/NZD and EUR/GBP. Trading these crosses increases your risk as these pairs, with the exception of the EUR/GBP, move very fast and can be very volatile.

I am presently short the EUR/USD from a cost average of 1.3541. Just below 1.3500 I reduced my trade size from 100% to 40% to limit my risk as we get closer to 1.3450. I am hoping that the EUR/USD continues to fall and should it do so I will add to my position. At the same time I am ready for it to bounce from support at 1.3450. When possible, I will move my stop, which, is now at break even probably to 1.3490 in tandem with the EUR/USD fall so that I can keep profits if it does bounce at 1.3450.

There is a major news event for the Eurozone on the horizon. On Thursday we have an interest rate decision and an ECB press conference to follow. There are calls that are getting louder for the ECB to cut interest rates. An ECB press conference is usually a volatile news event so if rates are cut and we have a chance for Draghi to talk the single currency lower we could see a huge move. On the other hand if nothing is done, the EUR/USD has great potential to rally

Below, I give my trade ideas for both options long and short (bear in mind the EUR/USD may test 1.3450 ahead of the ECB interest rate decision and press conference).

<b><span style="text-decoration: underline;">EUR/USD:</span></b>
<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURUSD-DAILY-CHART-02112013-1024x5161.png"><img src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURUSD-DAILY-CHART-02112013-1024x5161.png" alt="EURUSD-DAILY-CHART-02112013-1024x516" width="1024" height="516" class="alignnone size-full wp-image-3006" /></a>


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<strong>THIS WEEK’S CLOSING POSITION: 1.3486</strong>

From the chart above you can see two very long red daily candles, the EUR/USD is without doubt bearish. There is the potential for a large move lower should rates be cut. The recent fundamental news in the Eurozone has been poor, and, whilst I think the pair will bounce if rates are not cut a lot of attention and subsequent moves in the pair will be dependant upon what Draghi says in the press conference, so the bounce could be limited. We will have to wait and see.

<strong>WITH A RATE CUT:</strong>  The 50% retracement of the move highlighted in the chart above is just below 1.3300. I see this as the first goal lower.

<strong>NO RATE CUT:</strong> The bounce will happen but it may not be as dramatic as we think it could be because of poor fundamentals. The first goal would be a move back to 1.3580.

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<b><span style="text-decoration: underline;">EUR/CAD:</span></b>
<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURCAD-DAILY-CHART-02112013-1024x516.png"><img src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURCAD-DAILY-CHART-02112013-1024x516.png" alt="EURCAD-DAILY-CHART-02112013-1024x516" width="1024" height="516" class="alignnone size-full wp-image-3007" /></a>

<strong>THIS WEEK’S CLOSING POSITION: 1.4049</strong>

From the chart above you can see that we are on trend line support at 1.4082. I took a long trade in this area yesterday (Friday) a very small position with a tight stop of 80 pips.

<strong>WITH A RATE CUT:</strong> I think that I would be stopped out if I am still in this trade. The target for the first resting place on a move lower would be 1.3940. This would represent a full retracement of the move on the chart. The potential however could be to go a lot lower.

<strong>NO RATE CUT:</strong> I think that a move back to 1.4250 would be possible and that is what I am hoping for should we see a bounce with this currency pair.

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<b><span style="text-decoration: underline;">EUR/AUD:</span></b>
<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURAUD-DAILY-02112013-1024x516.png"><img src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURAUD-DAILY-02112013-1024x516.png" alt="EURAUD-DAILY-02112013-1024x516" width="1024" height="516" class="alignnone size-full wp-image-3008" /></a>


<strong>THIS WEEKS CLOSING POSITION: 1.4284</strong>

As you can see from the chart above we are in a triangle pattern. This pair causes me some issues and as a result unless I have a 100% confirmation of a move I would personally not trade it.

I would also like confirmation of how the AUD/USD is moving before thinking about trading this pair in either direction.

<strong>WITH A RATE CUT:</strong> We could fall very quickly to 1.4100. This would seem to be a great place to think about taking a long trade.

<strong>NO RATE CUT:</strong> The move back to 1.4520 and beyond could be in play.

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<b><span style="text-decoration: underline;">EUR/NZD:</span></b>
<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURNZD-DAILY-CHART-02112013-1024x516.png"><img src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURNZD-DAILY-CHART-02112013-1024x516.png" alt="EURNZD-DAILY-CHART-02112013-1024x516" width="1024" height="516" class="alignnone size-full wp-image-3009" /></a>

<strong>THIS WEEK’S CLOSING POSITION: 1.6303</strong>

The move lower has basically taken this pair from trend line resistance back to trend line support based on the daily chart above, that was a swift move from 1.6700 to 1.6300. A long trade offers good risk / reward if you want to try. Personally, I would want the NZD/USD to be moving in the same direction as the EUR/USD to give me the confidence to enter a trade with this pair.

<strong>WITH A RATE CUT:</strong> This pair could be as low as 1.6000 very, very quickly. I would be long here.

<strong>NO RATE CUT:</strong> A bounce to 1.6500 could be seen, maybe higher.

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<b>EUR/GBP:</b>
<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURGBP-DAILY-02112013-1024x516.png"><img src="https://weeklyfxdrivethru.com/wp-content/uploads/2013/11/EURGBP-DAILY-02112013-1024x516.png" alt="EURGBP-DAILY-02112013-1024x516" width="1024" height="516" class="alignnone size-full wp-image-3010" /></a>


<strong>THIS WEEK’S CLOSING POSITION: 0.8466</strong>

<strong>WITH A RATE CUT:</strong> This pair could be trading at 0.8425, which is the 61.8% retracement of the last big move on the daily chart. If this level does not hold 0.8375 is the next level.

<strong>NO RATE CUT:</strong> A move back to 0.8500 and then 0.8525.

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I will review these trade ideas as the week progresses via Twitter and in the “Midweek Fx Fix” on Wednesday.

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<b><span style="text-decoration: underline;">3. MY CURRENT LIVE TRADES:</span></b>
<p align="center"><b>EUR/USD
</b><b>Short
</b><b>Yesterday’s Closing Position 1.3486
</b><b>Entry / Cost Average: 1.3541
</b><b>Position Size: 40%
</b><b>Stop Loss: 1.3538 (basically a break even stop)
</b><b>Target / Limit: 1.3250
</b><b>Present Position: +54 pips</b></p>
<p align="center"><b>USD/CAD
</b><b>Long
</b><b>Yesterday’s Closing Position 1.0418
</b><b>Entry / Cost Average: 1.0486
</b><b>Position Size: 40%
</b><b>Stop Loss: 1.0350
</b><b>Target / Limit: 1.0540
</b><b>Present Position: -68 pips</b></p>
<p align="center"><b>NZD/USD
</b><b>Short
</b><b>Yesterday’s Closing Position 0.8264
</b><b>Entry / Cost Average: 08257
</b><b>Position Size: 40%
</b><b>Stop Loss: 0.8340
</b><b>Target / Limit: 0.8150
</b><b>Present Position: -17 pips</b></p>
<p align="center"><b>EUR/CAD
</b><b>Long
</b><b>Yesterday’s Closing Position 1.4049
</b><b>Entry / Cost Average: 1.4096
</b><b>Position Size: 20%
</b><b>Stop Loss: 1.4000
</b><b>Target / Limit: 1.4250
</b><b>Present Position: -47 pips</b></p>
<b><span style="text-decoration: underline;">4. OTHER POTENTIAL TRADES THAT ARE ON MY RADAR:</span></b>

I am focused on the moves with the EUR and it’s crosses. I do however have one limit order trade still in position with my broker. I have not cancelled it and although it is quite some way away from the current market. It is set at a key level in my opinion so I am going to leave it in place.

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<p align="center"><b>USD/CHF
</b><b>Long at: 0.8865
</b><b>Stop Loss: 0.8825
</b><b>Initial Target: 0.9000</b></p>
<p align="center"><b> </b></p>
<b><span style="text-decoration: underline;">5. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</span></b>

<b>EUR/USD: Closing Price 1.3486.</b> Definitely in a bearish trend. 1.3450 looms as key support.  I see resistance at 1.3580. Only at this level would the bulls resume control.

<b>GBP/USD: Closing Price 1.5922.  </b>Critical support at 1.5900 lies ahead. If we break below here I see 1.5750 looming. A lot depends on how the EUR/USD trades as to how the cable will react. It is now bearish in my mind. Resistance for this pair is at 1.6010.

<b>AUD/USD: Closing Price 0.9436</b>.  I think that I want to short the "Aussie". But not here around 0.9520-0.9560 seems to be the resistance area. Support is really where we closed at 0.9440. I see 0.9350 as the next level lower.

<b>NZD/USD: Closing Price 0.8264</b>. Little change in the week. Why am I always trying to trade this pair lower? I keep asking myself that question and I still do not know the answer. We seem range bound with the "Kiwi". As I see it 0.8200 to 0.8340 is the range. Be clever wait for it to break free to give you the direction. I suppose being sensible the pair has consolidated this week after last weeks 200 pip drop lower. I would still wait for a range break before entering a trade.

<b>USD/CAD: Closing Price 1.0418. </b>Some good Canadian data has kept the lid on the "Loonie" breaking out. Maybe this week it will happen if the EUR/USD falls. The range is 1.0380 to 1.0440

<b>USD/CHF: Closing Price 0.9119. </b>I missed my trade from lower levels with this pair..argh!! Now it is setting up to move higher. The range I am looking at is 0.9050 to 0.9200.

<b>USD/JPY: Closing Price 98.66.  </b>The JPY "Abe and Kuroda" freight train rolls on. I just cannot fathom out this pair. One minute I think collapse, the next squeeze higher. On the upside a break through 99.20 sets up 100.00. On the downside 97.50 sets up a move to the critical 97.00 support.

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<b><span style="text-decoration: underline;">6. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</span></b>

SUNDAY: AUD – Retail Sales.

MONDAY: AUD – Cash Rate &amp; RBA rate statement.

TUESDAY: USD – ISM Non Manufacturing PMi.
TUESDAY: NZD – Unemployment Rate.
TUESDAY: AUD – Trade Balance

WEDNESDAY: CAD – Ivey PMi.
WEDNESDAY: AUD – Employment Rate.

THURSDAY: GBP – Interest Rate &amp; Asset Purchase Facility.
THURSDAY: EUR – Interest Rate &amp; ECB Press Conference.
THURSDAY: AUD – RBA Monetary Policy Statement.

FRIDAY: CAD – Unemployment Rate.
FRIDAY: USD – Non Farm Payroll &amp; Unemployment rate.

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<b><span style="text-decoration: underline;">7. FINAL THOUGHTS:</span></b>

Lots of news items during this next week that will/ should be market movers. I think that this is a week where you should be selective in what you trade. Keep your risks to a minimum.

As always, trade mean and trade lean inside the limits of your trading plan.

I will update in the middle of the week ahead of the ECB press conference, which, is the pick of the news events, with the “Midweek Fx Fix”.

Good luck and take care.

Scott Pickering
The Pip Accumulator
Saturday November 2nd 2013

FOLLOW ME AT:
Twitter: @pipaccumulator
Google+/scottpickering

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