<strong>1. INTRODUCTION:</strong>

World Cup fever has been slowing already slow Forex markets, and, I think we are now entering the summer doldrums. Our trading ranges are being well defined, the extremes created by false breakouts or false breakdowns are getting very familiar. So face the facts, we need to get our summer trading brains into position. For PREMIUM SERVICE subscribers, in the TRADER TOPIC section this week I have written an article called “Tips in adjusting to the Forex market when there is low volatility”, and when combined with last weeks article “Are you forcing trades?”, these two articles will give you my thoughts to add to your own on dealing with and managing summer trading.

Over the past week, we saw Carney backtrack and fumble his way rather unconvincingly through his session in front of the UK Parliamentary Select Committee that he reports to. Not as much a HAWK when somebody asks him a question and places him on the spot was he?

We had “Jim (I want to make a name for myself on TV) Bullard” the St Louis FED president, come out across the media on Thursday and state that he sees interest rates rises in the U.S. Q1 2015 for definite… This had the desired effect on the markets, nice bit of volatility, which I missed through connectivity issues. Thankfully we have stops to protect us in such unforeseen events, should they occur. As usual, what was taken away was given back, within 24 hours.

The big news for me was the poor U.S. GDP data. On the third reading (Holy Mother of God…three readings), it was revised further on the negative side from -1.0% to -2.9%.

Did it affect equities? Not as much as I thought it would. As you know for the children on Wall Street, “Good news is good news and bad news in good news”. However, the effects of this revision created a stir with regards to all market makers revising their own calculations. Being my usual cynical self, all they do is just amended the actual and amended their targets for 2014 so that their numbers balance.

Wall Street is a numbers game supported by the FED. When you look at the indices charts we are looking at very exhausted formations. I read last week that the biggest buyers of stock on Wall Street at the moment are companies buying back their own stock to improve their EPS. Top line sales are just not there because spending is not happening and with fuel and food prices on the up and up, wages on the down and down (in real terms) who is spending?

Companies are not hiring, there is no real demand therefore to “dress up” performance and balance sheets so they are using cash reserves to buy stock to show an improving EPS. Next are redundancies to keep the balance sheets looking good? All is not good economically in the U.S. despite what you hear.

The largest spender in the world needs disposable income to spend…increasing food and fuel prices are stealth (hidden) taxes that hit almost everyone immediately to everyone rich or poor.

There are interesting times ahead, given the change in FED monetary policy, never mind issues with the BOJ and BOE, and then the ECB is a whole other matter.

The PREMIUM SERVICE has 13 open and live trades in play at the moment, with no limit orders in the background. Many more than I thought that there would be, most of them are in real terms longer FUNDAMENTAL style trades.

I am watching a lot of RED on my screens, as most of my trades are negative. They are mostly very small positions but they are negative all the same. I took these trades on the basis knowing that they could reverse but my positions are small and I am well within my RISK MANAGEMENT parameters within my TRADING PLAN. If I add to my existing positions, which, I knew that I might have to do, they will be profitable very quickly on a momentum move. I can also half trades to reduce risk. I have several options but I am not at this stage concerned. My FUNDAMENTAL views have me in these trades the way that they are.

The PREMIUM SERVICE is still adding $$$ each month. I am very, very happy about this and at the end of this month I will be sending out a half-year summary about the performance over the social networks.

Here’s an incentive - if you open an account with one of my approved brokers I can obtain a trading bonus for you and depending upon the size of your initial deposit the bonus could pay for a 12 months subscription to the PREMIUM SERVICE and give you cash back. Based on the performance so far, with just 50% of the year gone, you would see a handsome profit. That It is a convincing argument.

Why not open a separate account with me and try it?

Finally, with regards to the PREMIUM SERVICE the 4-week trial special offer has ended. This really placed so much more administration time into my day it took sales time away. I doubt I will re-introduce it so 10 weeks will be the minimum option at $150.00. All details on the PREMIUM SERVICE can be found on the welcome page of the WEEKLY FX DRIVE THRU at <a href="http://www.weeklyfxdrivethru.com">www.weeklyfxdrivethru.com</a> at the top of the page.

If any of you have questions about the PREMIUM SERVICE please contact me at drivethru@weeklyfxdrivethru.com

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<strong>2. THE VIEW FROM MY TRADING DESK:</strong>

<strong>THE FED &amp; BOE versus BOJ, SNB and ECB</strong>

Following on from my article regarding the celebrity status of the Central bank governors around the world, I give you part II.

For all those people who defended Mario Draghi with emails, tweets and LinkedIn comments to me over the past 7 days…let me re-iterate my view, which, has NOT changed. He is a puppet from Berlin and quite frankly his performance at best in mediocre, the ECB has failed the people of the Eurozone in dramatic style. To say that he is independent of political influence is total bulls**t and 100% total crap. The Eurozone epitomizes dithering, indecision and inept management. These views I just cannot see changing. How people can defend a central bank that sets out forward guidance and then constantly revise data and move the goal posts to meet these forward guidance objectives, is best at any stretch of the imagination…poor.

Moving on from the pleasantries….

(Later in this article, I am going to give a TRADING TIP (SET-UP) to all readers whether PREMIUM SERVICE or FREE NEWSLETTER SUBSCRIBERS).

We now enter a very interesting period in Forex trading. The Currency manipulators are changing sentiment.

Central banks that were basically aligned in 2008-2009 are now going their own ways after dealing with the fallout of the financial crash in their own way. Monetary policy decisions are changing across the board and we have to take notice as this will effect out trades in the short and medium terms. Being a FUNDAMENTAL trader first then technical this is the sort of news I love. Irrespective of what type of trader you are this now going to affect all of us.

All we have heard of for years is “easing”, “accommodative”, “firmly anchored” and “for an extended period of time”. It’s changing.

The current major players in currency manipulation at the moment are: -

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

The FED started the ball rolling with the word of 2013 “Tapering”. Each month the amount of support to markets provided by the FED has been reducing by $10 billion per month. It now stands at $45 billion per month down from original $85 billion.

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

The UK still has an Asset Purchasing Facility in place to purchase “Gilts” of £375 million.

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

Last year (April 2013) the BOJ committed to $1.4 trillion of quantitative easing through the Japanese economy inside two years.

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

It still has in place, I think, the OMT (Outright Monetary Transactions), it did not use this tool when it was announced.
The ECB introduced LTRO (Long Term Refinancing Operations), which I believe are now completed.
Earlier this month it introduced negative deposit rates for banks wanting to deposit overnight funds. Full-blown Quantitative easing is apparently an option and not yet ruled out and there are more initiatives to come.

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

It has in place a floor limit on the EUR/CHF pair at 1.2000. Due to it’s proximity and ‘safe –haven” status. The SNB is an interesting party to the currency manipulation in play currently operated by the central banks. It is direct and openly known to all markets. There is 100% clarity in what is going on and where the limits lie.

In the past 14 days we have heard the following: -

<span style="text-decoration: underline;"><strong>IN THE GREEN CORNER</strong></span>

Mark Carney from the Bank Of England, in his annual Mansion House speech alerted the markets that they are underestimating economic matters as interest rates in the UK will be rising much faster than they think. This prompted GBP buying. Subsequently, he fumbled at the MPC session that he took questions at stating that rates would be very staggered over basically an extended period of time. Recent financial reviews that I have read are expecting the first rate hike Q4 2014 that is this year!

Jim Bullard, the St Louis FED president said a few days ago that interest rates would be rising in the U.S. Q1 2015. This sits nicely with what Ben Bernake stated just before he left the FED stating that tapering would run out 2014, leaving the door open for gradual rate increases.

and

<span style="text-decoration: underline;"><strong>IN THE RED CORNER</strong></span>

Shinzo Abe, the Japanese Prime Minister talked about his 3<sup>rd</sup> arrow (stimulus talk). I would say he is sweating bullets at the moment because in spite of massive stimulus his attempts to revive the Japanese economy could be at risk of failure. Like the USA consumer spending is a problem. This is a key driver to a growing economy. The Nikkei is down this year by 6% after a 60% rise last year. The USD/JPY is up 3% this year when last year the JPY weakened against the USD by 21%.
More stimulus / more easing is on it’s way.

The ECB through Mario Draghi is easing. Whichever way you slice it, the ECB is on a policy of continued and increasing easing. Draghi almost re-iterated his 2012 call of “Whatever it takes”.

The SNB has said through governor Jordan that it will react to the ECB stimulus policies to protect the CHF currency.

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Therefore, we have two central banks moving away from accommodative policies and three continuing and probably adding to what it already has in place.

From a traders perspective this should only lead to two words...”HAPPY DAYS”. We should also get momentum and direction across certain pairs.

I mentioned at the beginning of this article I have a trade set-up to consider. It is the EUR/GBP short.

This pair is a compelling trade from my perspective. The Eurozone is easing and the UK is hiking rates, this monetary policy divergence places the EUR/GBP at real risk of a major downside move.

The chart below shows my downside objectives of 0.7800 and hopefully in the very long term 0.7400.

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<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/EURGBP-MONTHLY-28062014.png"><img class="aligncenter size-large wp-image-3959" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/EURGBP-MONTHLY-28062014-1024x464.png" alt="EURGBP MONTHLY 28062014" width="1024" height="464" /></a>

There are other pairs that jump out as well with this change in policy. These will be delivered only to subscribers of the PREMIUM SERVICE.

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<strong>3. LOOKING FORWARD…THE KEY SUPPORT &amp; RESISTANCE LEVELS WITH THE USD MAJORS:</strong>

<strong>EUR/USD: Closing Price 1.3648.</strong> We have moved upwards by about 50 pips over last weeks close. My bias is to the downside given all the fundamentals surrounding the single currency, but it is just as much about the USD as it is about the EUR. The U.S. economy is not as great as the U.S. says it is and there is so much B.B. talked it is hard to cut through it. Bottom line is the U.S. needs consumer spending and consumer confidence to get growth really moving. All the talk about the weather…big fecking whoopee!! If the U.S. economy was moving forward we would not still be wasting time panicking about Q1 GDP when we are about to start Q3!
Ultimately, I do see that because of two different monetary policies operated by the central banks (FED &amp; ECB), this pair will fall. For now however, I see the immediate range as 1.3510 to 1.3750.

<strong>GBP/USD: Closing Price 1.7023</strong>. Basically unchanged in the past week, so the cable is consolidating above 1.7000 for now. Carney the HAWK was Carney the WET FISH during the week with the MPC review. This pair has a range of 1.6950 to 1.7060.

<strong>AUD/USD: Closing Price 0.9415</strong>. A little higher this week over last weeks close at 0.9387. Given that we have an RBA statement early hours for me Tuesday morning, it will be interesting to hear what words of wisdom Glenn Stevens has for us this month. If you recall when the AUD/USD was at 0.9000 he was calling for the exchange rate to be more like 0.8500. It’s risen about 4% since that call for it to go lower. So what will Mr. Stevens say on Tuesday morning? Only the good lord knows at the moment. The range is quite tight 0.9350 to 0.9460.

<strong>NZD/USD: Closing Price 0.8777</strong>. The most over-valued currency pair on the planet in my opinion marches onwards and upwards. I am still short, and I keep adding at highs, when this baby drops Champagne is on me!!
The top of the range, all time highs are at 0.8880 and it may well be that we have to touch here before falling back. I am adjusting all my stops accordingly. However, I would not rule out “Wheeler the Dealer” directly intervening, he must be having sleepless nights over the NZD strength across the board. He never ruled this out as a way to control the exchange rate.
This guy has to learn he cannot raise interest rates and then complain that the exchange rate is too high. It just does not work that way. Verbal intervention fools no one these days. The range is really from 0.8720 up to 0.8880.<strong> </strong>

<strong>USD/CAD: Closing Price 1.0661.</strong> A nice move is happening with the Cad and it’s crosses. We have fallen through key support at 1.0715 and are now zooming in on 1.0650. We can go lower as long as Oil prices are elevated. The range that interests me is 1.0585 to 1.0740.

<strong>USD/CHF: Closing Price 0.8905</strong>. Even though we are sitting on support at 0.8910. Boring, boring…not interested in this pair unless the EUR/USD nose-dives below 1.3550. The range is 0.8850 to 0.8960.

<strong>USD/JPY: Closing Price 101.39. </strong>This pair looks like it’s heading much lower once again. I am saying this after writing last week that I thought it was moving higher…!

I am finding it very difficult to read JPY moves. The range that I am looking at is 101.15 to 101.85 / 102.15.

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<strong>4. MAJOR FOREX NEWS THIS WEEK THAT INTERESTS ME:</strong>

SUNDAY: NZD – Business Confidence.

MONDAY: CAD – GDP.
MONDAY: CNY – HSBC Final Manufacturing PMI.

TUESDAY: AUD – RBA Interest Rate Statement.
TUESDAY: USD – ISM Manufacturing PMi.
TUESDAY: AUD – Trade Balance.

WEDNESDAY: USD – ADP Non-Farm Employment Change.
WEDNESDAY: USD – FED Yellen speaks.
WEDNESDAY: AUD – RBA Stevens speaks.
WEDNESDAY: CNY – Non-Manufacturing PMi.

THURSDAY: GBP – Services PMi.
THURSDAY: EUR – Interest Rate decision and Press Conference.
THURSDAY: USD – Non-Farm Employment Change and Unemployment Rate.

FRIDAY: N/A.

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<strong>5. THE PREMIUM SERVICE:</strong>

I refer quite a bit in my blog about the PREMIUM SERVICE. As I am always having new readers I thought it may be of value just to highlight one or two points relating to the PREMIUM SERVICE.

This is a subscription membership with exclusive content for subscribers, both on the website and daily by way of an exclusive twitter feed and a morning news letter THE DAILY FX POST that is posted to the PREMIUM SERVICE section of my website. If this something that interests you, I just want to also mention that the $20.00 four week trial subscription offer will end shortly. I have no plans to re-introduce this again this year.

If you want an alternative view on the Forex Market or just someone else’s thoughts to bounce off your own, maybe it’s worth a look. Introductory special offers are available from time to time, it maybe the best small investment you make this year.

For more information about the PREMIUM SERVICE check out the welcome page of <a href="http://www.weeklyfxdrivethru.com">www.weeklyfxdrivethru.com</a> situated on the top of the page there are a number of drop down menus that contain all the things required to join.<strong> </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. I also show you the year-to-date performance by trade style.

There is a lot to data to absorb, if you have queries just email me.

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS-1-28062014.png"><img class="aligncenter size-full wp-image-3964" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS-1-28062014.png" alt="PREM SERV PROFITS 1 28062014" width="445" height="423" /></a>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS2-28062014.png"><img class="aligncenter size-full wp-image-3965" src="https://weeklyfxdrivethru.com/wp-content/uploads/2014/06/PREM-SERV-PROFITS2-28062014.png" alt="PREM SERV PROFITS2 28062014" width="456" height="416" /></a>

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.

In order to provide you with more information and clarification, 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>6. FINAL THOUGHTS:</strong>

The double whammy happens on Thursday; Non-Farm payrolls from the U.S. and Draghi’s ECB Press Conference. Other big news events are early Tuesday morning for me the RBA rate / policy statement. Will Glenn Stevens talk down the Aussie?

Up until these events, I would say that we might just drift towards Thursday’s news, but in the background I would also imagine that many U.S. traders would be on vacation around the July 4th holidays. In addition we still have World Cup fever in play. So, in reality although it may look like a double whammy on the surface there may be outside influencing factors that could make these events less market moving than normal.

Therefore, keep your TRADING DISCIPLINE high…do <strong>NOT</strong> FORCE TRADES as the chances are you run a much higher risk than normal of being caught out on the wrong side.

Keep your position sizes a little smaller and stops a little wider to allow for any lack of liquidity swings and hopefully you will get by.

Take care and good luck.

Scott Pickering
The Pip Accumulator
Saturday June 28th 2014

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

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