NO MATTER WHAT… BUY THE DIP REMAINS THE STRATEGY: By Scott Pickering

  1. THE FIRST FEW SHOTS:

Welcome.

Whenever I type December I am already thinking about Christmas, New Year and not being too anal but next year’s trading plans.

With regards to my FX trading next year and my plans with the PREMIUM SERVICE, I will announce them on a “drip feed” basis in the “DRIVE THRU” blogs between now and the final one of 2017 due out on 17th December.

So, with my own version of the countdown just two more “DRIVE THRU’s” until Christmas after this one!!

I have had feedback to the recent changes with the DRIVE THRU blog format. I would like to thank those who commented about the changes, there were some positives and some negatives to the new structure.

  • Some miss “THE SOAPBOX” – some don’t because it’s NOT directly currency related.
  • Some want more charts. These are reserved for PREMIUM SERVICE subscribers throughout the trading week, sorry.
  • Some want both – more charts and more SOAPBOX!!
  • How to trade the week favourably received.

The blog takes me about 6-8 hours in total to write, compile and post. My wife, spell checks, grammar checks and signs off that I am NOT being too extreme. Then it has to be broken into the different formats for the various social media releases, update and post the WordPress versions and post the manual versions onto various Social Media formats. My goal is to reduce the time spent on production but have it just as focused but at the same time away from the usual FX reviews. I am a strong believer in differentiation.

Moving on…

Please keep the feedback coming I love it and if you picked the DRIVE THRU blog up via TWITTER and you like my style and/or approach please feel free to re-tweet it!

Remember you can always subscribe to the PREMIUM SERVICE to get more of my approach on a daily basis and at the same time get some help on making pips. My target for 2018 is 10,000 net pips…. I dare you!!

Next…

I enter December with 19 x LIVE TRADES and 14 x LIMIT ORDERS in position raring to go. Normally I would say, as we approach the end of the year it is time to slowly pullback and reduce RISK into the year end…. yeah right!

As soon as I plan something like this, opportunities come leaping out at me. It’s all about life choices and the FUNDAMENTALS, so for PREMIUM SERVICE subscribers please note it is very highly likely circa. 99.9% that there will be trading through the Christmas holidays, I just cannot see how it will not happen at this precise moment in time. So; get prepared for, paper hats on, turkey drumstick in hand and Jack Daniels by the side of the keyboard trading coming to a screen near you!

Enough of that…

My sampling of my competition continues. Here is the best from this week’s experiences.

How to start this is difficult. I was trying to keep an open mind but pick me up off the floor!!

I do despair sometimes. I know that I am NOT perfect and sometimes I can be off the wall son occasion with trades, but FFS, I have heard it all now.

Planets in alignment to move markets.

It’s not a question of Venus and Saturn, there has to be joke in here about Uranus.

HMOG, you may as well place biscuits over potential trade set ups on paper, place them on the floor and let my Labrador boy, Ozzy eat them. The trade under the biscuit he picks first is the set up to trade!

Talk about bollocks.

Moving on…

THE PREMIUM SERVICE had another great month in November, and it is now only 272 pips behind last year’s record total at this stage of the year.

NOVEMBER 2017 net TOTAL: 2,381 net pips
2017 YEAR TO DATE: 12,783 net pips

I do have a few trades hanging around with losses that I have carried forward into December. Most notable is a HEDGED 700 pip USD/CAD 3 separate trades position. The rest are small fry. So that contingent liability will have to be taken into consideration. The bottom line is however that I should remain (all things being equal) above my 10,000 pips per annum objective.

More details of the November performance can be found under the HISTORY & PERFORMANCE tab on my welcome page.

Staying in sales mode; now is a great time to join the PREMIUM SERVICE and be familiar and ready to go with the 2018 launch!!

Finally, …

Is anyone as sick of pigging BITCOIN as I am, my SPAM folders are full of it, for the remainder of 2017 there will be no mentions of fecking BITCOIN or crypto currencies in this blog. I don’t trade it, I am at the moment not interested in it, it is just a distraction to look at the charts and whilst I am sure it will remain around for some time, at the moment, I only have two words to say about BITCOIN… me arse!

I did find this gem on twitter this week however…

 

  1. THE FX MARKET PLACE THIS WEEK:


THIS WEEK’S ECONOMIC DATA RELEASES:

MY THOUGHTS ON THIS WEEK’S ECONOMIC DATA:

There is swoop of data this week. It will be challenging to say the least. There is a great deal of Tier one data that should influence FX moves through to the year end.

I think we have a pretty good understanding that the FED will raise come hell or high water, in fact “Hell” could freeze over but I still think Yellen will raise rates regardless.

In addition, of course we will continue to watch and listen to the fallout from the ex. TRUMP advisor Mike Flynn news that he will testify against the President of The United States. Having said that the “BUY THE FECKIN’ DIP” mentality even stands true when a possible impeachment case is on the horizon. After the Flynn revelations settled in and the Kushner links also came through, the markets then pared losses. No matter what the news, BUY THE DIP seems to always be the strategy in the U.S.

In no particular order: –

AUD: CURRENT ACCOUNT, RETAIL SALES, RBA, GDP & TRADE BALANCE.

JM&J, this is what you call a “Clatter” of data. It’s all good stuff and highly directional.

The AUD has been under pressure to the downside of late. RBA policy via Governor Philip Lowe has been “Status Quo” policy neutral. The housing situation in Sydney causes huge concerns and Philip Lowe has made it clear he is no rush to raise rates but he has stated recently that the next direction of AUD rates will be higher.

I rate Philip Lowe, I think he’s a thinker. I do NOT think he will want to rock any boats this week even if he has insider knowledge of any of the data numbers due to be released.

Retail Sales will be a biggie. Last time around it was a 0%. If it does not post a positive number in the run up to Christmas, it never will. This is a key release in my opinion. The Current Account and Trade Balance are important but maybe not as relevant into the year-end. Like many things in December its pushed into the next Calendar year.

GDP is as important as Retail Sales albeit it’s a backward-looking number. Last quarter it was 0.8%, a minimum of a beat will be required.

Trading the AUD will be awkward this week, with so much data. I enter with a lot of AUD short and long trades… so the PREMIUM SERVICE is HEDGED!!


USD:
JOBS DATA.

Recently there has been no correlation between the private sector and public-sector jobs data. So, DO NOT trust that the ADP numbers will be an indication of NFP due Friday this week.

These numbers are always watched and noted, but in relation to FED policy and the FOMC interest rate decision due later this month, they are not as important in my eyes. I WILL NOT be trading NFP. I will watch and be a trading voyeur but as I have stated many, many times you more often than not have more luck with a national lottery than you do with trading FX on NFP day.

As for the numbers, as long as the 6 month averages are maintained I cannot see how the markets could be disappointed. There should be a chunk of part-time given the time of the year and this will create chaos and disorder for the initial knee-jerk reactions but when it’s all said and done its all about wage growth to show inflation. So, the Average Hourly Earnings with the NFP data on Friday will be key.

I may have to hide my keyboard or take either Ozzy or Aoife for a walk as a distraction as I DO NOT want to trade NFP…. See you Friday then!

 

CAD: TRADE BALANCE & BOC.

I have two wives at the moment. My physical one and the other one is the USD/CAD. At times, I feel like I am married to three HEDGED TRADES as well. My losses are fixed at 700 pips while I wait to enter my “HEDGE OUT” trades to trigger.

The GDP and Jobs Data last Friday was a real pain in the arse, a nice little pre-data spike could have triggered my short trades. I am now I think probably waiting on this week’s data to hopefully get my entry price!

With regards to the data.

The TRADE BALANCE must move back towards positive and below CAD$3 Billion. It was April when it was last below CAD$2 Billion. It has a history of failing to meet forecasts.

Stephen Poloz has been a downbeat gloomy little fecker of late and it’s about time he had a spiked egg nog to cheer him up.

With the FED raising in December, there will be some pressure to follow suit. I just cannot see it this week. However, Poloz likes to surprise. One cannot rule it out. I would personally be astonished and would expect the next hike in Q1 2018.

I do however think he will be a little more upbeat on the CAD economy, he should be with last week’s data and also with the run up to the year end and the Christmas holidays.

 

USD MAJORS – SUPPORT & RESISTANCE LEVELS with BIAS:

 

 

USD – TRADING CHARTS:

More often than not I will use DAILY CHARTS for my analysis. My commentary and thoughts for each trading pair are above the charts.


EUR/USD:

Not much of a change in my thoughts or the chart that sits below. I think that I may have changed the colours of the lines that’s about it!

GREEN LINE = support at 1.1817
PURPLE LINE = my bull / bear line at 1.1880
DARK RED = resistance at 1.1960
BLUE LINE = recent highs at 1.2090

The upward channel remains pretty much intact. We have been in a range of 1.1817 to 1.1960 in the past week.

We need to obviously break above or below to get this pair moving along. I have this feeling that now we are in December it will take either NFP this week or the ECB the week following to get things moving and give us a direction to follow.

 

GBP/USD:

I had been writing all week about the 1.3450 level being broken and creating a short squeeze.

The chart below, shows a possible “CUP & HANDLE” pattern being formed with a measured move to 1.3900.

We must always temper the enthusiasm vis-à-vis the cable as it is always a news release away from a BREXIT announcement that can send it 100 pips lower or 100 pips higher. At the moment, there is a huge belief and more importantly a commitment to see serious progress acknowledged prior to the end of the year. This has me leaning more to the long side.

The 76.4% Fibonacci level that sits at 1.3508 is a key level. This pair was obviously spooked on the Flynn news last Friday. A break above this level should see the pair move towards a possible 1.4000 target beyond the CUP & HANDLE pattern, at the golden Fib. level of 161.8%.

 

 

 

AUD/USD:

The down channel remains intact albeit it was temporarily broken on the Flynn news. I am still bearish this pair and see 1.7640 as a great level to short from but even with the Flynn revelations this level failed to be achieved.

We are in a tight trading range between the PURPLE lines on the chart 0.7530 to 0.7640.

The RBA meets this week. I am not expecting any change in policy and I expect Philip Lowe to release a statement that is once again neutral.

 

NZD/USD:

We have a bullish engulfing candle from last Friday. This usually means that a move higher should continue to be seen. Of late, these candles have NOT produced the follow through that is usually seen.

We are range bound between the two PURPLE lines of 0.6780 and 0.6980.

Technically, I think that this move higher just gives us a better price to short from as politically New Zealand has issues to overcome and whilst this uncertainty remains in place the pressure to the downside will always prevail.

 

USD/CAD:

Bugger…

I really wanted to be short this pair, but I was looking for a level closer to the 200 DAY SMA and the 61.8% Fibonacci retracement level.

That is a “helluva” BIG RED candle on the chart. Usually BIG RED candles are followed by further BIG RED candles.

The trading range is 1.2660 to 1.2915.

We have the BOC this week, I just can’t see Poloz being dovish. I see him more positive than of late and this may send the USD/CAD lower. Ideally from my point of view I want him to dismiss last Friday’s data as “Mickey Mouse:” and send the USD/CAD back to 1.3000. I just can’t envisage that happening.

 

USD/CHF:

I am still dreaming of bull flags and pennants with this pair. The measured move is to 1.0350, which by interest is a previous level of resistance from last year.

If 0.9700 gives way on the back of the flight to safety move which has affected this pair following the “FLYNN” revelations, we could see a move back to the recent lows around 0.9400.

Be ready for a snap back move with this pair its correlation with its inverse relationship with the EUR/USD is out of sync. But make no mistake, on uncertainty the flight to buy GOLD also affects the CHF.


USD/JPY:

This pair was hit hard with the “FLYNN” news.

On Friday that is almost a 160-pip candle from 111.40 to 113.00. Quite a move for this pair. I think that the trading range to work with is 110.80 to 113.00.  This pair will be affected the most as equities and bonds fly around on the news headlines as they are released.

It goes without saying, do not get too heavy in a position size as when the market is headline driven moves can whip around very quickly.

 

 

MY THOUGHTS ON HOW TO PLAY FX THIS WEEK:

We are now in December. This is historically, a strange month, Christmas parties, sexual harassment claims, lawyers will be on 24×7 call outs, and from a trading perspective volatility tends to thin out as the market becomes less liquid.

We do have a few interesting snippets however to keep traders at their desks. The GREED factor will certainly come into play with the institutions and for us, the poor retail traders we have to be savvy and selective.

News items that are driving the markets have been based around the US TAX BILL, BREXIT and on Friday last week ex. TRUMP National Security advisor, Mike Flynn announced that he will testify against the President. BREXIT will play on for the next two years, but this month it is crucial for UK Prime Minister, Theresa May to see acknowledged progress has been made. My focus this week is GBP related.

 

You can see from the above Monthly GBP/USD chart that we are breaking out above a multi-year trend line (from August 2104).

This is big news if the push higher can be maintained and it should have a knock-on effect through all cable related pairs.

One other fact to note from the GBP/USD chart is to take a look at the November monthly candle. It is very, very bullish. In fact, when you look at the moves from the August 2016 lows the monthly candle pattern is trending nicely higher.

The PREMIUM SERVICE is currently trading EUR/GBP, GBP/AUD and GBP/JPY. I am as I have stated several times of late not 100% happy trading the USD at the moment and my focus is more away from the majors into the cross rates.

Cable will be my main focus this week along with the CAD (to initiate my “HEDGE OUT” trades).

We must note that the FED report via the FOMC on December 13th, with the ECB and BOE both on the following day 14th December. I believe Friday 15th December will be the last day with anything near normal trading volumes.

As you know I would usually write here to look at cross rate pairs as an option. My GBP trades are POSITION style trades for the long haul and my trading activity with cross rate currency pairs that already have limited liquidity will; be severely curtailed from now on given the reduced volumes ahead. The RISK of getting stuck with an increased volatile pair with reduced trading volumes is just not worth it in my opinion, no matter how much of a volatility junkie you may be.

Finally, as we enter a period, when the USD should be demonstrating increased strength through the passing of the TAX BILL, but more importantly Central Bank divergence, as Yellen will probably raise U.S. interest rates on December 13th,

Would it not seem common sense to maybe hold an emerging market cross? Maybe take a look at USD/ZAR, USD/TRY or USD/MXN.

The bottom line is to try to be cute. It is you versus the big banks.

FLYNN: It is a RISK OFF event in my opinion. I need to see reaction on Monday this week to get a better picture. On Friday, last week when the news broke it was like watching headless chickens running around a farmyard. Kushner was linked which may have helped the markets steady. But who knows? The DXY was slammed on Friday following the news breaking, but like the markets pared back after a while (see below).

 

 

  1. THE PREMIUM SERVICE:

The PREMIUM SERVICE is my own subscriber based Forex support service that offers subscribers my suggested trade set-ups and market commentaries.

Full details of the PREMIUM SERVICE and costs to subscribe plus the various trade styles and how suggested trade set-ups are communicated can be found on my website landing page at www.weeklyfxdrivethru.com by selecting the HISTORY & PERFORMANCE tab.

CURRENT 2017 PREMIUM SERVICE PERFORMANCE:

PIPS TOTAL NOVEMBER 2017:  = +2,381 pips
YEAR TO DATE:                              = +12,783 pips
Further information can be found by clicking TESTIMONIALS, PART-TIME TRADERS and FX PROMOTIONS tabs on my website www.weeklyfxdrivethru.com

Alternatively, if you prefer to watch a video recording about the PREMIUM SERVICE, click the link below. You will be directed to a 40-minute webinar presentation entitled “AN INTRODUCTION TO THE PREMIUM SERVICE”.

http://screencasts.weeklyfxdrivethru.com/watch/cb6fqiIAZX

To subscribe to THE PREMIUM SERVICE, you will require a valid credit card.

  1. PREMIUM SERVICE SUBSCRIBERS ONLY:

(Only SUBSCRIBERS to the PREMIUM SERVICE can view this section of the BLOG)

4:1. TRADING REVIEW:

4:2. SENTIMENT CHART, FUNDAMENTAL & MACRO THOUGHTS:

4:3. TRADING PLANS:

4:3.1. TRADING PLAN OVERVIEW THIS WEEK:

4:3.2.  EXISTING CORE TRADES (PLANS & STRATEGIES):

4:4. CURRENT LIVE TRADES & LIMIT ORDERS:

4:5. FX BROKER NEWS with their MARKET FEEDBACK:

 

  1. THE FINAL SHOTS:

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Alternatively, if you prefer to watch a video recording about the PREMIUM SERVICE, click the link below. You will be directed to a 40-minute webinar presentation entitled “AN INTRODUCTION TO THE PREMIUM SERVICE”.

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To subscribe to THE PREMIUM SERVICE, you will require a valid credit card.

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.

Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator

https://weeklyfxdrivethru.com/disclaimer/

BLOG VERSION: #261 FREE NEWSLETTER
3rd December 2017

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