MOVING AV E R A G E B OUNCES STRATEGY
TRADER MAGAZINE
PROFITS HOW TO LET RUN
USD THROUGH
2015
EMU AND EUROZONE
POLITICS ELLIOT WAVE IN PRACTICE SELF-LIMITING
BELIEFS
JANUARY - MARCH 2015
war on the
Ruble
US USES OIL AS DIPLOMATIC AND ECONOMIC WEAPON. TRILLIONS OF DOLLARS IN OIL DERIVATIVES ARE AT RISK.
CONTENTs
FX
24
COMMODITY CURRENCIES Effects of a Lower Oil Price on the FX Market
MOVING AVERAGES How to profit from Moving Average bounces
45 07 EDITOR’S NOTE
MONETARY POLICIES
ASK THE COACH 12 How to Let Profits Run?
49 Unfitting policies will not save the Euro-area or Japan in 2015
CURRENCY WATCH 15 US Dollar through 2015: Long-term Trend Remains Higher, and the Ruble will remain in rubble MACROEONOMICS 19 Eurozone: Will Greece be in EMU at the end of 2015? TRADING PSYCHOLOGY 40 Four Self-Limiting Beliefs that Sabotage Your Trading Performances TECHNICAL ANALYSIS 28 Elliott Wave Analysis: Putting the Theory into Practice
WAR ON THE RUBLE
31
US uses oil as diplomatic and economic weapon. Trillions of dollars in oil derivatives are at risk. Cover image source FreakingNews.com
BOOK REVIEW 62 TraderMind by Steve Ward
72 Federal Overnight Reserve Repurchase Repo and Fed Funds Implications for 2015
TECHNICAL REPORTS 76 Majors: EUR/GBP, EUR/USD EUR/JPY, USD/JPY
58 New G20 Banking Rules or “The Day Money Died”
80 Trends and Targets: Majors, Emerging and Asian Markets
INDUSTRY WATCH
80 Featured Pairs: USD/CAD, GBP/JPY, USD/ZAR, USD/MYR
36 Interview with Peter Rosenstreich, Head of Market Strategy at Swissquote TRADING STRATEGY 53 When to trade against the fundamentals 67 Get prepared to beat your previous trading achievements
88 CONFERENCES & SEMINARS INTERNATIONAL DATA 84 FX Spot Monitor 85 Central Bank Rates 86 Economic Data - FX Poll 87 Markets View 89 ECONOMIC CALENDAR FX TRADER MAGAZINE January - March 2015 3
MACRO ECONOMICS The ruble has dropped by ne a rly 50% against the dollar since last January
by Ellen Brown
The unanticipated drop in the price of oil was an act of geopolitical warfare
FX
$3.9 trillion of banks’ derivatives speculation is on the price of commodities, including oil
WAR ON THE RUBLE
US uses crude oil as diplomatic and economic weapon. Trillions of dollars in oil derivatives are at risk.
The Russian Ruble was 2014’s biggest loser plunging nearly 50 percent. An additional 17 percent drop is predicted under the pressure of sliding oil prices and U.S. and European economic sanctions against Russia.
FX TRADER MAGAZINE January - March 2015 31
FX MACRO ECONOMICS
The sudden dramatic collapse in the price of oil appears to be an act of geopolitical warfare against Russia. The result could be trillions of dollars in oil derivative losses; and depositors and taxpayers could be liable, following repeal of key portions of the Dodd-Frank Act signed into law on December 16th.
On December 11th, Senator Elizabeth bill. It was not only a notable about- derivatives. As explained inTime: Warren charged Citigroup with face for the president but represented “holding government funding hostage an apparent shift in position for the The best argument for not freaking to ram through its government bailout banks. out about the repeal of the Lincoln p r o v i s i o n .” Amendment is At issue was a that it wasn’t section in the nearly as strong omnibus budget as its drafters bill repealing intended it to the Lincoln be. . . . [W] Amendment hile the Lincoln to the DoddAmendment Frank Act, was intended which protected to lasso all risky depositor funds instruments, by by requiring the the time all was largest banks said and done, it to push out really only applied a portion of to about 5% of their derivatives the derivatives activity of business into nonbanks like Bank F D I C - i n s ur e d Originally the Lincoln Amendment only of America, subsidiaries. applied to about 5% of the derivatives Citigroup, JPMorgan Chase, Warren and activity of top tier US banks and Wells Fargo, R epresentative according to a Maxine Waters 2012 Fitch report. came close to killing the spending bill because of Before Jamie Dimon intervened, it this provision. But the tide turned, had been reported that the bailout Quibbling over a mere 5% of the according to Waters, when not only provision was not a big deal for derivatives business sounds like much Jamie Dimon, CEO of JPMorgan the banks and that they were not ado about nothing, but Jamie Dimon Chase, but President Obama himself lobbying heavily for it, because it and the president evidently didn’t lobbied lawmakers to vote for the covered only a small portion of their think so. Why?
32 FX TRADER MAGAZINE January - March 2015