- INTRODUCTION:
I am at the moment in the middle of packing, preparing for a house move from Quebec to Nova Scotia, which, is followed very quickly with a trip to New Zealand and Australia. In the full knowledge that over the next two months, I will be away from my office and screens for long periods at a time, I have been setting up my longer-term (POSITION) trades to reflect this. To accommodate our house move, this blog is the last one for two weeks, the next “DRIVE THRU” is scheduled for release on the 14th May.
Last week and this coming week are shorter trading weeks to cover the Easter holidays, so trading volumes will be lower as traders look to add vacation days either side of the public holidays to take full advantage of time away from the office. This is a great time to conduct full chart reviews and analysis and, for me, knowing that I will be moving and traveling it allowed me time to build up a book of potential LIMIT ORDERS to add to my core positions.
When will I learn? I have been writing and tweeting about the loose cannon “TRUMP” with his twitter account, stating be ready for the unexpected and trade nimble. Last Wednesday, my wife and I had a few action items to complete ahead of our house move. I left the house with my open trades in great shape. I was tempted to bank $$$ and take pips, but made the call that momentum and trends were in play and decided to review the open positions based upon Wednesday’s closing candles.
FFS; TRUMP does it again. He walks back another key campaign promise by not declaring CHINA a currency manipulator, and jawbones the USD lower in a WSJ interview / article.
The result was the DXY fell from basically 101.00 down to just sub 100.00. Five limit orders triggered and my trading book inverted. Basically, I was looking at a sea of “red numbers” when returning home.
I tweeted to subscribers that I expected pullbacks to occur through the following Asian and European sessions on Thursday. That did not happen to the extent that I had thought, but the New York session did the trick and I decided given the heightened geopolitical risk going into the Easter weekend to remove trades.
Whilst, I did not really want to remove tiny profitable trades off the table, with what had happened the previous day and with warplanes in the sky and the fleet in the China Sea, to reduce RISK seemed sensible. I took about 100 pips off the table in profits. It really is a grab ‘n’ go market at times.
Throughout this entire market move, there appeared to be very few traders on twitter admitting to having suffered on this news event. Was I the only poor sod long the USD at that time?
Looking at twitter it appears so… do I need to spell it out again about twitter?
Moving on and back to “THE DONALD”
His dictatorship style must be pissing off his cabinet, he undermines Rex Tillerson and now by saying that China is NOT a currency manipulator he undermines and steals away the thunder from Steven Mnuchin’s treasury office review and report on Easter Monday about currency manipulation. This makes TRUMP himself responsible in a way for a LEAK of an official document ahead of its due date. I know he is the President and all that… but lead by fecking example. Keep it in your pants for God’s sake.
FFS… “POT KETTLE BLACK, EGO, HAIRSPRAY, TWEETS & FLIP FLOPPING”
Then in that same interview TRUMP jawboned the USD lower (that was the move talked about above), on the back of “people think I’m doing a great job and the USD has strengthened as a result but it’s too strong because of the confidence they have in me, it should be lower”.
FFS… What a load of bollocks.
TRUMP’S first 100 days would have been nothing short of a colossal F**K UP so far had he not carried out a missile strike on Syria and unloaded the MOAB (“Mother of All Bombs” on Afghanistan). The gun lobbyists and other far right sections of US society must be loving this. It’s like an episode of “Deadwood” gun-ho politics from the wild west in 2017.
The attacks are a distraction from the many main events, such as “THE DONALD” simply cannot figure out how to deal with career politicians. So, he’s not that smart, just a huge ego and there are still no “great deals”. Every campaign promise made with such confidence has so far been walked back. He is “flip- flopping” on the fundamentals he was elected for in his manifesto. So much for draining the swamp he is being consumed by the very aspect of D.C. he stated unequivocally that he would fix.
Obamacare; the repeal / replacement call it what you want, was an absolute failed dictatorship approach and the Republican party needs to look in the mirror and question their professionalism. After 8 years in the wings with time to prepare and given it was a front and centre policy for the election its failure to pass shows how poor U.S. politicians are. There are simply no excuses.
Where is his wall?
Where are the trade deals?
What about taxes?
What about all the infrastructure promises?
What about the quick fix on repatriation of offshore US funds?
I may be a little unfair with the above. Yes, I acknowledge that TRUMP alone won the election for the Republicans and he did it without a party machine behind him. It makes the Hillary Clinton failure even more catastrophic and shows that the Democrats were out of touch. The elitist approach taken by Hillary was doomed from day one, but like most leaders she surrounded herself with “YES” people.
However, the first 100 days: So far; It’s just phony, the US voters have been seriously duped by TRUMP; It’s just ego and hairspray.
Finally, on “THE DONALD”
Let me get this off my chest….
Jawboning is a form of currency manipulation, just as Quantitative Easing (QE) is as well. The US was and still is in my opinion a CURRENCY MANIPULATOR and in more recent history was the first to promote manipulation following the 2008-9 Financial crash.
Right now, I feel that the TRUMP administration so far is …
NOTHING MORE THAN ”POT KETTLE BLACK, EGO, HAIRSPRAY, TWEETS & FLIP FLOPPING”
I feel much better after that…
Last week’s economic data was centered around the BOC interest rate decision and the Aussie Jobs, with the USD inflation and sentiment numbers.
Stephen Poloz at the BOC was basically a yawn fest. He spoke about improvements and the housing issues across Canada. He will do a Donald, and walk this back next time around. Watch this space.
Aussie jobs were a blowout; incredible numbers: – 61,000 new jobs versus the forecast of 21,000. The full-time / part-time ratios were impressive.
With regards to the US consumer confidence numbers; the Preliminary reading was at 98.00. This is big number and despite everything that I have observed and the media have played down, the positive TRUMP EFFECT feeling in the U.S. remains intact. Confidence in TRUMP and confidence in the U.S. economy is high. It was 98.6 in January after the Presidential inauguration and although it dipped for a bit, it is back up again.
The inflation aspect is still looking to be around the 2.5% mark in 2018. This number will fuel a whole host of issues regarding FED policy and TRUMP’S desire for low rates. The cynic in me says he wants low borrowing costs not as much for America but for his family business interests, which he longer has an interest in… yeah right, my arse!
Then on Good Friday we had weak CPi Retail Sales data which basically shows from a macro and some might say micro level that the consumer is pulling back…. uncertain.
Contrasting U.S. data. One month’s data will not reverse FED policy but it clearly shows how difficult this stuff is to trend from a Central bank perspective.
Moving on…
THE WEEKLY FX DRIVE THRU – LIVE webinars.
#10 this Monday 17th April at 5:30PM.
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- THE FX MARKET PLACE – LOOKING FORWARD:
ECONOMIC DATA RELEASES:
MY THOUGHTS ON THE WEEK AHEAD:
Nothing much this week for me from Economic Data releases, however, I think that geopolitical news will continue to dominate proceedings: –
- GBP: Retail Sales numbers are released on Friday. This is always going to be an interesting number to follow given the BREXIT process. The PMi numbers were largely disappointing; two out of three were poor.Consumer confidence and sales numbers are important to the UK especially at this time, given the inflation issues that are creeping into the UK economy. How will this inflation effect retail sales?
- OPEC: WE have a two-day OPEC meeting that concludes on the Saturday of next weekend.I know that one should be serious about OPEC but I do find the “CARTEL” similar to a bunch of misfits allegedly united. If history repeats itself the production cut will fall off the page the longer they try to keep it in place.
I maintain my view expressed, almost every week, as I review WTi on the WEEKLY FX DRIVE THRU – LIVE WEBINAR, which is, that as soon as OIL hits $60.00 a barrel should it ever get there again, US Shale producers will be leaping back into the market in numbers. OIL is a pure and very simple supply and demand commodity.
Obviously, the BREXIT news will be on the wires at ad-hoc times. I am however, expecting this to calm down as the 27 members of the EU do not meet to formally discuss BREXIT until the end of April and negotiations do not start until the end of May. Nevertheless, we still should be on our toes.
USD MAJORS – “IMMEDIATE” SUPPORT & RESISTANCE:
The charts below contain commentary (my thoughts and views), these are the USD major charts that are reflected in the spreadsheet above.
EUR/USD:
GBP/USD:
AUD/USD:
NZD/USD:
USD/CAD:
USD/CHF:
USD/JPY:
- THE PREMIUM SERVICE:
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PREMIUM SERVICE PERFORMANCE YEAR TO DATE:
MONTH TO DATE: +520 pips
YEAR TO DATE: +1,993 pips
I am still a little way behind my target. But trading is gathering momentum once again and I am still very confident of achieving my year-end target of 10,000 net profitable pips.
PREMIUM SERVICE – SUBSCRIBER PROMOTION:
“DOUBLE IT UP”
I usually run a PREMIUM SERVICE subscriber promotion at the end of the old year /start of a new year.
Because I knew that this year I would be moving home and traveling in Q2, I deliberately decided to wait, to launch a promotion around that time.
This is the biggest and I believe the best subscriber promotion that I have ever offered.
What is “DOUBLE IT UP” all about…
Basically, from now until June 30th, 2017 anyone who subscribes to the PREMIUM SERVICE through my “SUBSCRIBE HERE” tab at the top of my welcome page will have their subscription period doubled at no extra cost.
In addition, all subscriptions regardless of the date of subscribing will not start until June 30th 2017.
This means that from the day of joining the PREMIUM SERVICE you will have 100% access. This could give you up to an additional 12 weeks of membership to the PREMIUM SERVICE depending upon the date you subscribe.
This 12-week period covers the period that I am moving home and traveling, and therefore there may be days at a time with zero activity, and there will be some because I will be out of coverage and simply on vacation, but it’s all “FREE” in any case, so whatever happens, it is all a bonus anyhow as your subscription period will officially commence June 30th 2017.
Confirmation of the “DOUBLE IT UP” will be contained in the “welcome on board documents” the accompanies your subscription confirmation.
This is the best and most generous promotion that I have ever offered since starting the PREMIUM SERVICE and I hope that many of you take advantage.
IMPORTANT TO NOTE: Joining the PREMIUM SERVICE now on a 10-week subscription gives you a 20-week subscription period with THE DOUBLE IT UP promotion. This basically covers 2017 in total when you allow for the summer break and the delayed promotional start of your subscription period. At CAD$1,000 this is a great opportunity and fantastic value.
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- THE SOAPBOX:
FRENCH POLITICS and THE FED… MOVING FORWARD
You would probably think that from my commentary in the introduction I would be over my ranting and positioning on my soapbox?
Think again; as you know I love politics and I believe that politics and forex are so closely inter-twinned, the push ‘n pull relationship is hard to break apart and dissect. At times the FX BLOG can be very POLITICAL in places.
The title FRENCH POLITICS and THE FED is a little misleading. It is my blog, my thoughts and opinions so I can collate titles and themes as I want to.
Where to start: –
FRENCH POLITICS:
The single currency has been under tremendous down side pressure in the past two weeks. All rallies have been selling opportunities and have been well capped.
Technical traders are both confused and baffled at the same time as to why the market can see no value in the EUR from spikes and potential sentiment changes.
Fundamentals will trump technicals and we are in a news driven market at the moment where geopolitical news trumps everything. I would rather trust fundamentals in the current market above all else.
The French Presidential election has opened a new chapter and the balance of persuasion is shifting. Let me elaborate on my thoughts as to why those pen pushing, desk sucking, jotter blotters in Brussels have twitchy bottoms.
Up until about three weeks ago, the race for the next President of France was by all accounts a done deal. The pundits had done all their calculations and basically it was most likely to be either a Le Pen or Macron victory in the first round of voting with both going through to the second round with Macron beating Le Pen by a hefty margin.
It has been a tame French Presidential election so far, with only the odd scandal, no stories involving the front runners with a sex scandal involving a wet lettuce, whipped cream and an egg whisk. All was relatively calm for a French election.
Enter, the far-left candidate Jean-Luc Melenchon.
France has always been a sucker for unionism and being bolshie, Holy Mother of God all the poor French laws that once existed in France, now repealed, are still alive and thriving here in Quebec!! There is a state of “Non-Satiety” here in Quebec, no let up at all.
Back to my point…
The latest election poll from Ipsos-Sterna for newspaper Le Monde shows the following: –
April 23rd, 2017 first round voting: –
Emmanuel Macron (Centrist Party): 22%
Marine Le Pen (French National Front): 22%
Jean-Luc Melenchon (Far Left): 20%
Francois Fillon (Conservative): 19%
(Second round voting is on May 7th, 2017)
As I said, I love politics, and the above positions say several things to me.
- If this poll is accurate. This election is too close to call.
- How on earth can you say with any degree of confidence who will progress into the second round?
The question that leaps off the page at me is the following, and, I think that this is one major reason why the single currency is un-ceremonially dumped on spikes.
Do you think that Far Left and Far Right voters would unite in a second round of voting against the mainstream thinking?
If so… there is a huge chance that a populist candidate could be victorious and then its bye bye Brussels, bye bye EUR and probably bye bye the EUROPEAN UNION.
You can see from the chart below that the EUR/USD is sold aggressively into the 1.0665 – 1.0690 level. The extended wicks back up my thoughts of the market seeing no value as there is no following through.
THE FED:
Absolutely no connection to the FRENCH POLITICAL scene but just as intriguing.
I am going to re-visit this in detail, I just have to.
The following is all my theory based upon the re-appointments due with the FED.
At this moment in time I believe that TRUMP is going to try to remove the FED’S independence. I see TRUMP as a currency manipulator himself and it would not surprise me to see him exert control on U.S. interest rates moving forward.
I believe he will approach the FED in a stealth manner / style of approach.
In the next 12 months. Both Janet Yellen, Fed Chair and, Stanley Fischer, Deputy Chairman plus 3 board members need to be replaced as there are vacancies, plus we have the usual round–robin of voting to non-voting members being shuffled.
“THE DONALD” believes he is so popular and that to fuel his popularity further, keeping a lid on interest rates would serve him better based upon his future policies that he hopes to push through.
The FED who are trying to normalize monetary policy are screwing with his plans.
He has the chance to appoint nothing but “DOVES” to the board in all capacities and effectively “cook the books”, to fiddle policy moving forward to meet his administrations objectives.
He would make it his business to have a hold over those “newbies” appointed. It’s what he does.
Therefore, with White House influence “THE DONNALD” will become in my opinion the biggest currency manipulator of all time
Could this happen?
Does he just need to sign an executive order to make it so?
Will he drive this thru a Republican owned congress?
From a trading perspective, we must be ready for something here in my opinion. My entire year is based a huge amount upon central bank monetary policy divergence. Instead… it could be based on a new race to the bottom.
Think about that over the next two weeks whilst I am moving house….
- 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 and see you next on May 14th, 2017
Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator
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