The US Dollar is Weak, But You Can Still Hold Other Currencies
- Posted by Greg Harmon
- on March 1st, 2011
Just because the US Dollar is in trouble it doesn’t mean you can’t hold currencies. Every night I put out a chart on the US Dollar Index so believe me when I say it does not look pretty. But there are other currencies that do look like they are prepping for a move higher. Below are three currency ETF’s to watch that seem ripe for a move in the near term.
Wisdom Tree Dreyfus Yuan Fund, ticker: CYB
CYB had a nice trend up move from September to mid October. It then retraced about half of the move through to mid December. It followed that move with another retrace of about 50% and has now settled into a symmetrical triangle pattern centered on that last 50% level. This is often a continuation pattern and if it continues higher and through the top rail at 25.45 then the target for the pattern is a new high at 25.75 and then a target of 25.85 for the measured move on the continuation. It has support of the 50 and 100 day Simple Moving Averages (SMA’s), a bullish Relative Strength Index (RSI) and a Moving Average Convergence Divergence (MACD) indicator crossing bullishly. Get ready for it.
Wisdom Tree Dreyfus Emerging Currency Fund, ticker: CEW
CEW is also in a symmetrical triangle after an even longer trend higher. A continuation breakout of this pattern above 22.53 has a target of 23.10, just above the two previous shooting star tops and then a target of 24.75 for the measured move on the continuation. It also has the support of the 50 and 100 day SMA’s, a bullish RSI and MACD indicator crossing up bullishly to help it move higher.
CurrencyShares Japanese Yen Trust, ticker: FXY
FXY is also in a symmetrical triangle pattern after a tend move higher. A break out higher above the top rail at 121 would create pattern breakout target of 127 and then a measured move on the continuation of 136. This one is falling back now and needs to show that it can hold onto support at the 50 and 100 day SMA’s just below it. But it does have a bullish RSI and a MACD that is already increasing bullishly.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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