&nbsp;
<ol>
 	<li><span style="font-size: 14pt;"><strong>THE FIRST SHOT:</strong></span></li>
</ol>
Another week has just flown by once again.

I am banking $$$ and pips as I go along although my brokers containing my POSITION TRADES are just mainly a sea of red. Every now and then I bank pips, in fact, this month I have +1,115 pips from POSITION trades alone but the broker accounts never seem to move! My shorter-term trades are far more fluid, with just over +1,000 pips emanating from shorter-term trading so far this month. It looks as though February 2018 could be a record month. I thought that last year’s +1,420 pips was a great total but providing nothing stupid happens this February will be the best since 2014, which was the PREMIUM SERVICE inaugural year.

Moving on…

Most of the focus recently has been on US10year Treasury Yields as they approach 3%.

It appears to me that the only subject that is consistent across all the G10 major Central Banks at the moment is INFLATION. It used to be DEFLATION that was the primary focus, but Central Bank Presidents and Governors couldn’t say that word without squeezing their buttocks together, so they created the word DIS-INFLATION instead. Since the US 10YRTreasury 3% level became a reality, INFLATION is mentioned soooooo many times now!

From a trading perspective at least, we know more than ever what data attracts more policy attention and focus.

However, we had the FOMC minutes from Yellen’s last meeting published last Wednesday. What a farce that was. A massive spike in stocks and drop in DXY to be completely reversed and “some more” all in 3 hours. Just some crazy movements in prices. I just love the TV anchors / analysts trying to find a logical reason behind a complete reversal switch in market sentiment. Sometimes it is just impossible to know why. I am now more often than not sidelined at these bigger “market moving” news events: - FOMC, NFP, ECB Press Conferences and BOE Super Thursday’s. I no longer see the point of trading these events they are often just knee-jerk moves and to trade to make 20 pip moves is just NOT my bag at all. Having said that at times beggars can’t be choosers!

&nbsp;
<ol start="2">
 	<li><span style="font-size: 14pt;"><strong> MARKET OVERVIEW – MY THOUGHTS:</strong></span></li>
</ol>
<p style="text-align: center;"><span style="font-size: 14pt;"><strong>CALM BEFORE THE STORM?</strong></span></p>
I sense an unease with market sentiment… God I’m good at this!

No matter what you trade, BONDS, STOCKS, FUTURES, COMMODITIES or FOREX every morning regardless of your location on this planet you must get the “I wonder is this going to be the day” thoughts going through your head.

I only trade Forex, I am just NOT interested in anything else to trade although from next year, I may add trading indices to my trade portfolio, but that is as good as my “what happens if’s” that I post to twitter most mornings to my PREMIUM SERVICE subscribers, it may not happen for any number of reasons.

We are in volatile trading times at the moment. A little bit of background.
<ol>
 	<li>The USD index (DXY) is presently bouncing off recent lows of 88.15 trying to establish a base and work its way back above rent short term highs of 90.45. If it does NOT surpass this level, I will be calling the bounce off 83.15 a dead cat bounce.</li>
 	<li>THE SPX is off its recent highs of 2,728.75 following the recent crash in prices. It hit an intra-day low of 2,706.25 and it is trying to use this level as a base from which to attempt to regain lost ground.</li>
 	<li>Given that we now have inflation into the US economy, the traditional flight to safety of GOLD has been flexing its muscles. It has been in a range from lows of $1,309.00 to highs of $1,370.50 per ounce for the past 3-4 weeks.</li>
 	<li>US Treasuries 10 Year Bond Yield. This has been the subject of much speculation because of the recent equity markets crash. The yield has been drifting higher for quite some time, ignored by equity traders. At the time of the last Non-Farm payrolls print, which included the mark-up in Average Hourly wages deemed to be the reason for the crash the yield spikes to 2.88%. Since NFP day it has been as high as 2.95%... 3% is looming!

Higher U.S. interest rates from the FED on the horizon caused treasury yields to react higher.

Bond yields are sensitive to inflation and there is also a relationship between the US 10 year note and the USD/JPY.</li>
</ol>
Now, I could spend hours on this subject. I do not want to do that because it’s boring, my point that I want to make is that everything, regardless of market is linked one way or another. It is the classic DOMINO EFFECT.

A couple of years ago I wrote a blog titled THE DOMINO EFFECT and, in my opinion, we are here again. The penny may have finally dropped with equity traders that interest rates are going to rise and instead of burying their heads in the sand, they make a more professional approach.

I think that it would be fair to say that the FX market reaction has in the main been fairly muted. The EUR/USD has not been running up and down the charts like a headless chicken, it has been very placid. The USD/JPY has been flexing but no way near as much as I had thought it may have given the situation.

If this current market revision in sentiment, was a party, I would say that the BOND and COMMODITY traders arrived first, followed quickly by the FUTURES traders then by the FX traders and what seems to be the case on every occasion the EQUITY traders are last to arrive. The penny needs to drop with a loud bang for the message to register.

The FOMC minutes release last week was a classic case in point. On a quick scanned glance, I thought that the minutes looked confirming, to me it was HAWKISH. I was astonished when the USD was sold off. I covered positions and took limit orders off the table, only for about 60 minutes after being released the USD started to spike as the reality of the content of the minutes was interpreted accurately. The USD losses were more than wiped out with gains into the close.

We have markets that are having problems adjusting. The BUY THE DIP approach is just NOT going to work in a two-way market which finally looks like it’s going to be on the cards once again.

But it’s not going to be that simple.

We have an administration in D.C. that really does NOT want a strong USD, which, seems to be a hand in glove partner to the T-Bill moves, the stock market moves, and the commodity price moves that will be on the cards with inflation and a cycle of increasing interest rates in the pipeline.

This creates uncertainty, which in turn will fuel volatility.

I am a believer in correlations; correlations do matter whether they are inside one market or an inter-market correlation. These are fundamental to the DOMINO EFFECT.

It’s complicated but trying to keep it simple. USD (DXY), US Treasuries, GOLD, OIL, USD/JPY, the VIX and the SPX all have a correlated inter-woven part to play to moving forward. Right now, there is an element of doing their own thing. The SPX is no longer reacting the 10 Year Yields, OIL and the USD not in sync, USD and GOLD not quite there.

The upshot is that at the moment we have a CALM… a CALM BEFORE THE STORM. It is inevitable that a reaction is going to take place. The mini crash of a couple of weeks ago saw price movements in chunks at a time so fierce was the volatility. It will happen again.

When and what will be the trigger?

The $64,000 question.

Right now, I would say if treasury yields cross 3% it could be a strong catalyst. But it could as easily be something else like a collapse in OIL prices.

However, this week we have the new FED Chair, Jerome Powell delivering the FED Monetary Policy Report (Humphrey-Hawkins testimony) to congress this coming Tuesday. If he delivers a very interpreted HAWKISH view of the U.S. economy, it is possible that this could be the catalyst to set the DOMINO EFFECT in play.

However, …

There are so many “If’s and buts”. I think the phrase is “If ifs and buts were candy and nuts we’d all have a happy Christmas”. This STORM will happen long before Christmas this year, I think that I am safe in announcing that!

All we can do is sit in front of our screens each morning, go through our startup routines and ask the question… “Is today going to be the day” and get prepared. With every day that passes without reaction the big day looms closer!

<strong> </strong>
<ol start="3">
 	<li><span style="font-size: 14pt;"><strong>USD SUPPORT and RESISTANCE with my BIAS:</strong></span></li>
</ol>
<strong> <a href="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/TCHART-24022018.png"><img class="aligncenter size-large wp-image-11010" src="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/TCHART-24022018-1024x891.png" alt="" width="1024" height="891" /></a></strong>

<strong> </strong><strong> </strong>
<ol start="4">
 	<li><span style="font-size: 14pt;"><strong>THE PREMIUM SERVICE TRADING SUMMARY:</strong></span></li>
</ol>
<span style="font-size: 14pt;"><u>PREMIUM SERVICE PERFORMANCE YEAR TO DATE:
</u>(Incorporating the last 5 PREMIUM SERVICE TRADES)</span>

&nbsp;

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/PS-SUMMARY-24022018.png"><img class="aligncenter size-large wp-image-11014" src="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/PS-SUMMARY-24022018-1024x852.png" alt="" width="1024" height="852" /></a>

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You can get on board and join from as little as CAD$150.00 per month, conversions are roughly as follows: -

GBP £90 per month
EUR €100 per month
USD $120 per month
JPY 12,700 per month
AUD $150 per month

This represents a great value way to subscribe…  and a great RISK / REWARD!

You can subscribe for periods as well. Go to my website <a href="http://www.weeklyfxdrivethru.com">www.weeklyfxdrivethru.com</a> for more details under the TAB – “SUBSCRIBE HERE”.

<strong> </strong>
<ol start="5">
 	<li><span style="font-size: 14pt;"><strong>PREMIUM SERVICE SUBSCRIBERS:</strong></span></li>
</ol>
(This section is for PREMIUM SUBSCRIBERS ONLY)

<u>5.1. TRADING REVIEW:</u>

I am having a great spell at the screens at the moment. I make some fuck ups from time to time, but they are more than compensated for the better trades that are taken.

It is however, a challenging, annoying and at times a pain in the arse market to trade inside at times.

Quite hilarious really that the JPY should be proving to be “my go to trade” at the moment. I thought initially that the BOJ was changing policy and that the JPY would become the “FREEBIE BONUS TRADE” of 2018. That idea quickly fell on stony ground, but the US10 YR T-BILL and US inflation chatter has brought the JPY back into vogue for me!

The cross-rates continue to remain rangy. Only the CAD crosses appear lively, although the AUD is springing to life of late as the RISK OFF / RISK ON trade starts to re-appear. Although, the EUR/AUD needs to break 1.5850 to get its mojo going. For now, 1.5800 is difficult to pass, which is frustrating. I think I could have taken 70 pips profit 4 times already based on the rejections I have seen with EUR/AUD (FUN847). That trade has been live since 5<sup>th</sup> February, when I first saw the opportunity.

With Powell’s Humphrey-Hawkins testimony scheduled for this coming week, I am going to chop away lots of trades as I expect fireworks and God knows how the market will react.

&nbsp;

<u>5.2. SENTIMENT,</u><u> FUNDAMENTAL &amp; MACRO THOUGHTS</u><u>:
</u>

No change in my FUNDAMENTAL / MACRO THOUGHTS for 2018.

I am still bearish the NZD and CAD (albeit I am not trading it yet)

I am still bullish the GBP (even though I know that I could get a 100-200 pip on BREXIT data). For now, I am happy to trade GBP crosses.

I am also bullish the EUR, but I really need further clarity on ECB policy and the USD fragility concerns me to get heavy on USD related pairs. Very similar to GBP, I will look to continue to trade the EUR cross rates.

I am sitting on the fence with the AUD, CHF and JPY based on the longer-term (over 6 months view), I just don't know, there are too many imponderables.

Finally, the USD. After Powell’s testimony this week it might be clearer what his opinion is of the U.S. economy and it will be great to get an idea of his forward guidance. In theory, it should be the easiest trade on the planet, but with the TRUMP administration being currency manipulators and frankly a liability to the U.S. economy it is as clear as fecking mud!

Even with clarity from the FED, you just know TRUMP will undermine the FED if he decides to, which makes the USD hard to trade.

Despite all my economic background and MACRO views I think that we could see a momentous USD squeeze after Powell followed by the biggest sell-off in the USD in history. We could rise to (DXY) 94.00 and pullback to 80.00 in a couple of weeks or so. I find this so hard to reason out strategically without having the TRUMP EFFECT enter my thoughts.

The commodity currencies have their own thing, but the rest are so tied to US policy one way or another, I find myself looking at cross rate and JPY charts more so than USD charts.

As Prince would have sang “It’s a Sign ‘o the Times”.

&nbsp;

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/SENTIMENT-24022018.png"><img class="aligncenter size-large wp-image-11011" src="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/SENTIMENT-24022018-782x1024.png" alt="" width="782" height="1024" /></a>

<u>5.3. THE WEEK AHEAD:</u>

<u>5.3.1. ECONOMIC DATA RELEASES THAT INTEREST ME:</u>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/ECON-DATA-24022018.png"><img class="aligncenter size-large wp-image-11009" src="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/ECON-DATA-24022018-1024x905.png" alt="" width="1024" height="905" /></a>

<u>5.3.2. MY KEY EVENTS ON THIS WEEK’S CALENDAR AND WHY:</u>

There are only two events that have my attention this week.

<u>USD – JEROME POWELL – HUMPHREY-HAWKINS TESTIMONY:</u>

Probably, what one would call a “Baptism by Fire”.

It must be bad enough working for TRUMP, never mind having to deliver a key introduction about US Monetary Policy looking forward, and, then having to answer a series of statements, NOT questions from congressional senators who couldn’t manage their way out of a paper bag, who additionally, can be found in the corridors of DC sitting at coffee tables staring at orange juice cartons because it’s says “concentrate”.

I think at Janet Yellen’s last HH testimony last July I counted about 5 or 6 actual questions. The rest almost ran out time stating their position, never being able to ask a question…. Just a complete farce.

Never mind all of that….

Powell could shake out the markets within 5 minutes of starting to read his prepared statement. I will have to check is it pre-released a few hours earlier? This will be vital re: the market reaction and open trades.

I will 99%, NOT trade this event but just manage LIVE trades.

<u>
GBP – THERESA MAY - OVERVIEW OF THE UK POST BREXIT SPEECH:</u>

The BREXIT calamity rolls on with yet another Theresa May speech stating the UK position post BREXIT.

Frankly, if this speech does NOT lay it out 100%, I will be pulling out my hair…oh wait can’t do that I shaved my head. I suppose banging my head off the desk will just have to do.

We are slowly but surely getting to what the markets determine to be a HARD BREXIT. In my eyes as you are aware there has always been nothing other than a HARD BREXIT. I never really understood the need or reasoning to say SOFT BREXIT.

The facts are the same now as they were in 2016.

To avoid an EU contagion the UK will get it shoved up them like a red-hot poker up the bottom by the EU. An example will be made. No special deals, no friends with benefits deals on the side. Pure and simple a costly and difficult exercise with the EU pulling all the strings.

I can see a scenario where the UK just walks away with two fingers in the air pointing towards Brussels and Frankfurt.

It has to be one hell of a speech to remove uncertainties and give clarity. Well, I for one will not be holding my breath waiting for that!!

&nbsp;

<u>5.3.3. HOW I WILL APPROACH and TRADE THE MARKET THIS WEEK:</u>

I said this last week and added 559 pips! But this coming week I will be quieter than usual on both the morning updates and trade set ups.

Until the Jerome Powell testimony, I doubt I will trade unless something spectacular draws me in. After he delivers I may feel more inclined and look to add.

I really want to focus on NZD and JPY trades this week. I will hold existing GBP trades where possible, I have my GBP limit orders in place to capture large downside moves.

Basically, the news events this week are huge and to pre-trade them unless for very short-term trades would be crazy. I expect the markets to be range bound on Monday.

&nbsp;

<u>
</u><u>5.3.4. MY “MACRO” TRADING PLAN FOR THE WEEK AHEAD:</u>

My action plan for the week is lighter than usual for obvious reasons: -
<ol>
 	<li>Add NZD trades when appropriate.
I want to add back NZD/USD and NZD/JPY trades.</li>
 	<li>Add JPY trades when appropriate.
Looking to add USD/JPY, CAD/JPY, AUD/JPY and possibly EUR/JPY but this pair is NOT flavour of the month for me at the moment.</li>
 	<li>Maintain existing positions (if possible) with GBP trades.
I will be looking to add GBP/AUD and GBP/CAD trades if possible.</li>
 	<li>Formulate a strategy re: EUR long and CAD short trades.
Several cross rates that interest me have already been stated.</li>
</ol>
PLEASE NOTE:

A great deal depends on the market reactions this week as to how busy I will be in the market with trades and trade set ups.
<u>5.4. CURRENT LIVE TRADES &amp; LIMIT ORDERS:</u>

<u>5.4.1. CURRENT LIVE TRADES:

</u>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/LIVE-24022018.png"><img class="aligncenter size-large wp-image-11013" src="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/LIVE-24022018-1024x987.png" alt="" width="1024" height="987" /></a>

<u>5.4.2. CURRENT LIMIT ORDER TRADES:</u>

<a href="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/LIMIT-24022018.png"><img class="aligncenter size-large wp-image-11012" src="https://weeklyfxdrivethru.com/wp-content/uploads/2018/02/LIMIT-24022018-1024x758.png" alt="" width="1024" height="758" /></a>

<u>5.6. FX BROKER NEWS and MARKET FEEDBACK:</u>

Nothing to report this week. All very quiet on the broker front apart from the continued explosion into trading “Crypto” currencies.

<strong> </strong><strong> </strong>
<ol start="6">
 	<li><span style="font-size: 14pt;"><strong>THE FINAL SHOT:</strong></span></li>
</ol>
Nothing more to add here, I have said enough except,

As usual…

Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.

Scott Pickering
The Pip Accumulator
Twitter: @ThePremService

<a href="http://weeklyfxdrivethru.com/disclaimer/">http://weeklyfxdrivethru.com/disclaimer/</a>

BLOG VERSION: #167 PREMIUM SERVICE
DATE: 24th February 2018