THE WEEKLY FX DRIVE THRU
INTRODUCTION:
After an awful start to 2017 from a trading perspective, as they say “the ship has now steadied itself” (apologies if that is not 100% accurate). I have seen some green/black numbers on my broker account trading balances. It was nothing but red for most of January.
So… where do I go from here?
“To infinity and beyond”, “The only way is up”, “Digging in the Dirt”, off to my “Secret World” or maybe “2,000 light years from home?”
The answer is back to the hard graft taking on board what I have learned about this year’s market so far and the way it reacts based upon TRUMPANTICS.
In October 2016, I was speaking with a couple of investors one from Sydney and one from San Francisco on a SKYPE call and we were talking about Forex Trading in general. Whilst I knew that I had adapted a 2016 trading style that was different to 2015, it became apparent that in my first year of the PREMIUM SERVICE 2014, my trade approach was somewhat different than that of 2013. I am not saying that one needs to have camouflage or mimicry abilities each year or for that matter be some sort of chameleon to trade, but these qualities would help!
Being able to adapt and change is paramount and a critical success factor for trading longevity. Amongst other trivia such as RISK MANAGEMENT, POSITION SIZING and TRADE PLANS… I jest.
Moving on…
The FX market is without doubt news driven rather than by economic data at the moment. I think that over time TRUMP will understand that he can’t keep delivering ill thought out outbursts on every occasion. He can act business-like when required and I think that sooner or later he will settle down. Notice I placed no timeline here and no; I have not been drinking or smoking something illegal. I write this paragraph because an intelligent person would realize sometimes it is best to say nothing than to create uncertainty. I am making assumptions here, I know.
I think what helped last week, was that there was a sudden realization that other events around the world mattered. Following a phone call from NICOLAUS COPERNICUS to “THE DONALD” he was told that despite what he thinks he was NOT the centre of the universe.
The EUROZONE woes continued with the French elections with Mr. Fillon involved in a scandal concerning jobs for his family, which resulted in far right extremist Marine (Feck off the single currency and leave the EU) Le Pen leading in the opinion polls. With the populist vote on the rise, I would NOT rule out Le Pen with a serious challenge. Stranger things have happened…
Wolfgang aka “the pit bull” Schaeuble (German Finance Minister), has basically opened the door ready to boot GREECE out of the EUROZONE (more on this later in the blog).
With other “you’re gonna love it”, “it will be fantastic” news; the antipodean central banks RBA & RBNZ are basically moving away from dovish to neutral. They are far too savvy to go hawkish because they would get steamrollered should Janet Yellen at the FED go hawkish and raise interest rates in the US. Will Yellen raise rates? That is a whole ‘nother’ story as they say.
BREXIT A50 trigger is moving sweetly through the UK parliamentary process. It has passed through the commons and has now gone for its second reading in the Lords.
I just have a feeling this weekend’s Sunday papers are going to be a hoot in Europe.
Now some FX broker news…
Nice platform or not; those feckers at FXCM have been caught out and banned from operating in the US.
They took a huge amount off me vis-à-vis the CHF peg removal on my GBP/CHF trade. Following the PEG removal and cable FLASH CRASH last year I have heard of so many stories about poor service, that it comes as no surprise.
Is this the end for FXCM? I would say no matter what country you operate in many people closed accounts on the US news. If the owners lied to the US regulators, surely they have lied across the globe to other jurisdictions, if they believed for years that they had pulled the wool over US regulators; why wouldn’t they do the same elsewhere. A leopard never changes its spots.
This story will have legs over the coming weeks.
More…
I mentioned last week that I was going to focus in this week’s blog about my transition trades as I adapt to these changing markets. This will possibly be featured in next week’s blog.
Even more…
THE WEEKLY FX DRIVE THRU – LIVE webinars.
I am now getting to grips with the technology more and more, as time progresses. I am now comfortable with my 30-minute agenda. Basically, I take a “PICKERING” view of the week ahead. I think that having the webinar at the start of the week at the end of day one is possibly the best time to hold such an event. It allows for weekly candle follow through, or not, to take effect; plus, the first daily candle of the week is important in my eyes not just for possible continued sentiment but also for the establishment of any new moves.
#4 is on Monday 13th February at 5:30PM
- To attend live – you need Google Chrome as a browser.
- You cannot view on smart phones or tablets, only Laptops and Desktops.
The link is below: –
If you cannot listen live you can check out my You Tube channel, Scott Pickering Weekly FX Drive Thru for a freshly posted copy of the webinar, usually, within a couple of hours of its completion.
Finally, in this section…
If you would like to be in the monthly draw to win a “FREE 10-WEEK SUBSCRIPTION” to the PREMIUM SERVICE, valued at CAD$1,000.00, all you have to do is subscribe to receive this FREE NEWSLETTER on my website www.weeklyfxdrivethru.com On my welcome page just below my cube logo is where you complete your subscription.
Last week’s winner which I failed to annotate in the blog: brian@******.co.uk is fully up and running.
THE FX MARKET PLACE – LOOKING FORWARD:
NOTE: This year, 2017, I am not going to look backwards in this section only forwards. News items / points of interest from the prior week will be covered in the introduction.
ECONOMIC DATA RELEASES:
MY THOUGHTS ON THE WEEK AHEAD:
Several items catch my eye this week: –
- USD: Janet Yellen – Testimony to the Senate Banking Committee with her statement of US Monetary Policy.This should be a “doozy” as no matter what she says she could be upstaged by TRUMPANTICS.
However, let’s face simple economic facts. The US economy is performing basically very well and by all accounts “THE DONALD” is going to splash the cash that US does NOT have, to re-build roads, bridges and airports, which in comparison to Quebec where I live are fecking brilliant. If you want to see pot holes in roads, crumbling bridges, crumbling overpasses and crumbling buildings please put Montreal into your vacation plans. It needs money spent on it; big…’bigly’ money.
So, when TRUMP talks about airports in poor shape I can see his point, in New York and some other major hub cities. However, with regards to roads, if you travel from Quebec into Ontario or Quebec south into New York state the difference in the quality of the roads is noticeable at the state/province boundary. Just google it you will see what I mean.
Back to the point…
Yellen should be pushed on normalization of interest rates policy and this will be the issue that creates most volatility. The fact that the FED seems to have already once again pulled back from three rate increases to possibly just two or my opinion maybe just one this year will attract some attention, or rather it should.
- GBP: Jobs data is always an important economic barometer and something that governments are held very accountable for more than anything else by most voters.There is also CPI and Retail Sales this week from the UK.
The data since last June’s BREXIT vote has mainly shown tremendous resilience with the UK economy. However, I fear it is the hard numbers relating to the capital account etc. from the treasury that interests the markets more moving forward.
Without doubt in my opinion the withdrawal of capital from the UK and the movement of labour, which is inevitable in my opinion, will be what influences the direction of the cable exchange rate moving forward. For now, we have the opening act to deal with.
- AUD: Jobs data on Wednesday night. I want to see the AUD/USD back at 0.8000 so I can short it. Nothing more than that. So please let’s have some great numbers!!
- NZD: Retail Sales. Directly opposite to the AUD/USD, I would like the NZD currency to fall off the cliff (nothing against any kiwi’s reading this blog). Regretfully for me, these numbers look like they could be a beat never mind a failure…argh!!
As always bear in mind it has been news rather than economic data moving the markets so check twitter for tweets from “THE DONALD” and be aware of the BREXIT and EUROXZONE possibility to deliver geopolitical news at any time totally unannounced.
Remember, get your T-Shirt printed “Uncertainty and confusion rules”
USD MAJORS – “IMMEDIATE” SUPPORT & RESISTANCE with TREND:
My trade charts for the USD majors are below. My thoughts, views and commentary is written on the charts.
You will find my charts, hopefully easy to follow. I only use Fibonacci levels, trend lines, confluence points and sometimes chart patterns to identify my high probability trades. If you have any difficulty understanding the points that I am trying to make, please do not hesitate to contact me.
EUR/USD:
GBP/USD:
AUD/USD:
NZD/USD:
USD/CAD:
USD/CHF:
USD/JPY:
“THE SOAPBOX”:
“THE PIT BULL” MOVES IN…
WILL HIS ACTIONS BE NOTED AS HELPFUL
IN THE HISTORY BOOKS?
I love Wolfgang Schaeuble aka “The Pit Bull”.
The German Finance Minister goes places only “THE DONALD” would go. He is the closest to “THE DONALD” in the EUROZONE with regards sticking his oar in whether its required or not.
Laugh… Holy Mother of God. The management of the EUROZONE can only be compared to a set of chickens running around a farmyard with their heads cut off.
Who the hell is Schaeuble to tell a member state what to or what not to do? Every time he produces outbursts like this, it does make outsiders believe that the other 18 members of the single currency union are like provinces of Germany. I totally get his position as Finance Minister of Germany, and without doubt Germany is the powerhouse of the union. However, all members of the union are equal per the core documents and whilst Schaeuble can have his opinions, he isn’t even the leader of Germany and the fact that he sits on the Finance Ministers committee chaired by Jeroen Dijsselbloem with regards to the EUROZONE and its funding of GREECE, to me means he is once again over-stepping his mark.
However, on this occasion I ask was it helpful in the long run and should he have been more vocal in this direction 6 years ago?
Mario Draghi, ECB President, had a similar problem with Ewald Nowotny (Austrian Bank Governor) and Jens Weidman (German Bundesbank Governor) undermining what he was trying to achieve a couple of years ago. It is very noticeable these two ECB board members have shut up of late as it is in the best interests of ECB policy for them to do so.
In an interview, the issue of a debt haircut for GREECE came up. Schaeuble answered only as he knows how. It has been widely accepted that Schaeuble was showing GREECE the EUROZONE door.
Frankly Schaeuble and his counterparts on the committee managed by Dijsselbloem have kicked the GREECE can down the road for years, so maybe now is the time for GREECE to leave the EUROZONE and revert to the “Drachma” away from the single-currency. But, why wasn’t GREECE encouraged to leave before? Why did the EUROZONE Finance Ministers keep lending money, creating more and more conditions that the Tsipras led government has no chance of adhering to?
My God, it’s the Lisbon Treaty once again (Article 50 of BREXIT fame contained in it as well) that states that a “debt cut“ violates EUROZONE rules and a country would have to leave the EURO AREA to have one. The EU leaders must have been on acid or an equivalent when the Lisbon treaty was ushered in!
So, GREECE is front and centre once again.
Will the EUROZONE Finance Ministers finally get GREECE resolved? We are in a Mexican stand-off as I see it from a macro viewpoint.
- The IMF are clear from their position stating that in their opinion GREEK reforms promised to creditors are off track. The Tsipras lead Greek government reject this point of view… no surprise there. This mistrust goes all the way back to 2009.
- Schaeuble is very kind to GREECE. Do what you said you would do when you received your last bailout and all will be OK. GREECE needs the second round of bailout III money soon. The clock is ticking down.
- The issue with GREECE is not as much about the debt management as it is about remaining competitive in business. This is very difficult, as most businesses must operate without credit. GREECE has long become almost a cash only business environment. This makes it extremely hard to see growth and it opens black market trading and hides the real economy. How can you govern effectively in this environment?
- The IMF are reluctant to go further with financial support. If the IMF pull out, the Dutch government have said that without IMF continued support the Netherlands will not participate in any revised or updated Greek bailout.
- Bond yields in Greece are rising once again and time is running out to get a deal done before the EUROZONE elections take hold and hog the news.
What for GREECE then?
A debt haircut is required to enable the country to take control of its finances and move forward. I think I wrote this two maybe three years ago. We are now further down a stony, can ridden road and we have greater uncertainty than ever before.
Can GREECE survive outside of the EUROZONE?
They are lovely people and they have a backbone. They have shown tremendous resilience so far. It is however an absolute bloody disaster that 6/7 years later they are probably going to have to do what they should have done on day one.
Had GREECE left the single currency back in 2009 where would GREECE Be now? You would have to say probably in better shape. GREECE is the classic example that the EUROZONE ‘one size fits all’ approach does not work.
Now let’s be clear. GREECE did not help itself at times. However, the best solution is to leave the single currency as soon as possible and take control. There will always be buyers of debt and reverting to monetary policy control allows the freedom that GREECE requires to move forward.
Do we thank the PIT BULL for elevating the debate?
Historians may look kindly on this event when the books are written. It could however get lost in the 2017 bigger story about the EUROZONE / EUROPEAN UNION implosion!
CLOSING THOUGHTS:
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.
Take care, have a great trading week.
Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator
http://weeklyfxdrivethru.com/disclaimer/
BLOG VERSION: #49 FOREX TELL
DATE: 12th February 2017.
The post “THE PIT BULL” MOVES IN… appeared first on www.forextell.com.