Nigel Farage, leader of the UKIP party, who made spectacular gains in recent Eurozone elections, rightly points out that neither the English voters nor parliament were consulted on the “give away” and the repercussions could be far reaching,

There is already a bizarre situation in the UK in that many elected Scottish politicians (including previous Prime Ministers and lots of cabinet members) are already allowed to vote (and currently help the governments majority) on all things English AND Scottish residents receive £1600 more per head from UK tax payers than the English.

Even more annoying for English voters is that Scottish University education is free and yet in England parents have to pay £9000 a year in fees alone.

On the flip side Cameron and his mainstream party cronies now appear to be backtracking on some of their pledges, not a surprise, and are arguing about both the scale of the changes as well as the timing.

Here are a couple of articles on the subject: Nigel Farage Interview and Camerons Hangover From Hell

So the above is all about the political implications, what the markets will be more concerned about is the cost of the promises.

The Gbp has been falling recently and is in a clear downtrend and already the euphoria over the no vote has fallen flat so where next for the Gbp? See my analysis and the video below

Elsewhere New Zealand has re-elected its Prime Minister and although in a clear down trend could (most likely will) see a rebound at least in the short term.  The economic situation hasn’t changed but markets do like stability. Gaps are quite possible on all Nzd pairs at the market open and they may well not close straight away. I show in the video how many of last weeks big moves on the Gbp petered out at logical areas after the initial surges, so make a plan for Nzd pairs.

Last weeks Aud/Yen was a perfect example of this theory in action. Price gapped at the market open, where did it stop? At the area 96.30 + 10 as I explained in last weeks analysis. Only needed a 20 pip stop and a potential 1:5 risk reward ratio meant it was a no-brainer.

Finally there was a G20 meeting at the weekend and apparently everything is rosy in the world according to Australian Treasurer, Joe Hockey (Australia picked up the bill of $100′s MILLIONS for the meeting so you might expect him to say something positive). According to Hockey the financial world is improving rapidly and the “significant” outcomes of the summit would lead to millions of new jobs, he said.

I am not sure where the worsening situations in Ukraine, Syria, Iraq et al) fit in this picture but it will be interesting to see what if any impact the G20 statements have at the market open

The Forex Week Ahead

Gbp/$ Only interested to short, As ever I prefer a pull back but we may have already missed it. If it pulls back then anywhere around 1.6450/1.6500 will be good for me. Alternatively if it simply keeps falling then I would wait for a clear break and daily candle close below 1.6190. If it does drop then 1.600 will be a major hurdle to clear so expect at least a bounce back up there.

Euro/$: Still in a clear downtrend and I expect it to hit 1.2500 and even 1.200 by Christmas. Last week the Euro Banks only took €83 Billion of the €400 Billion that was offered to them under Draghis plan. If that doesn’t work then straight out Quantative Easing will be on the cards which will help fulfill my theory, but where to enter? 1.300 if it pulls back will be my choice. If it keeps falling I will wait for a clear break and daily candle close below 1.2800, THEN look for a pull back to short. There are opportunities elsewhere on the Euro which I show at the end of todays video.

Chf: I forgot to include it in the video but a pullback to 0.9165 would interest me but I will leave in current position. Its failed to break the weekly 200ema and the 55ema is only a 100 pips above, both are area that should see strong reactions/resistance

Aud. In 2012/2013 we had an awesome run of 11 wins from 12 trades on this pair focusing mainly on weekly pivot points. Price fell off a cliff recently and is well on its way to the Aussie governments hoped for 0.8500 but where did it stop? To the pip on a fib! So what to do this week. I show in the video how there are clues that we will see a pull back. 0.9280 is my preferred area for a pull back for multiple reasons; fibs, emas, support and resistance. However that seems unlikely right now so I will look at 0.9100 and 0.9200 on the way up.

If it simply keeps falling then I will wait for a clear break and close below 0.8900, followed by a pull back to enter.

Aud/Yen: Worked perfectly last week after a gap. 96.40 is the are again for me to long. Swing trades watch 98.00 for clues to short.

Euro/Gbp: The Euro zone is in a bigger mess than the UK so further falls are to be expected but where to get in? 0.800 once again is the main area. If price falls I will wait for a daily candle close below 0.7800 followed by a pull back.

$/Yen: I need a pull back and 105.00 is the place for me

Cad: 1.0800 for multiple reasons, explained in the video along with all of the following:

Gbp/Cad 1.8150 short, swing traders watch 1.7550 for bounce back up (not for me)

Euro/Nzd: If Nzd gaps upwards then looking to short and 1.600 is the perfect place

Euro/Cad, fundamentally and technically short 1.4370 bets place OR break and daily candle close below 1.400 which is a BIG area.

Finally Nzd Cad: Again could gap upwards BEST area for me is to short at 0.9140 for multiple reasons if not will watch 0.9045 on the way up

New members please note: If I am looking to take a trade long, at for example 1.5000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.

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regards

Marc Walton

Weekly Outlook Video: