8 Ways to Play Currency Markets with 4 Stock Charts

Everyone is sitting on the sidelines waiting to see what the Bernanke will say and how it will influence stock prices. So why not trade some currencies while you are waiting. Here are four currency ETF’s that look ready for a trade opportunity and get better as you run through the alphabet.

The Currency Shares Australia Dollar Trust, $FXA, made a high in late July and fell back in early August. It retraced up to the 50 day Simple Moving Average (SMA) just above the 50% Fibonacci level and bounced back to previous support and is hovering near the 38.2% Fibonacci level. The major bounce higher brought the Relative Strength Index (RSI) up to the mid line but could not crack it. The Moving Average Convergence Divergence (MACD) indicator climbed steeply and turned positive as well. But now it is weakening. Watch this for a move below 104 to short with a target of 101.93 and ten 100.7. If it were to strengthen and move above the 50 day SMA at 106.10 then it can be played on the long side to resistance at 107 followed by 107.5 and 109.

The Currency Shares British Pound Sterling Trust, $FXB, has been moving higher in a series of steps, making higher highs and higher lows, since bottoming in July. It is now at a decision point where it has a RSI that running lower and a MACD that has crossed down, as it sits on the 100 day SMA. If it fails it can be played short to support at the 160-160.37 range and below that at 159. If it bounces here then look for a move up to 164 followed by 165 and a retest of the high at 166.12.

The Currency Shares Canadian Dollar Trust, $FXC, is in a symmetrical triangle after falling from a double top near 105.50. As it navigates the triangle the RSI is moving sideways in the bearish region, but the MACD is diverging higher and looks about to cross positive. A move up above the top rail of the triangle at 101.50 has resistance at 102.50 and 103.10 and then a target on the pattern break at 103.75. A fall below 100.50 sees support at 99.90 and a target on the continuation lower at 95.50.

The Currency Shares Swiss Franc Trust, $FXF, may be the best opportunity after its recent pullback from the high in early August. Support at 123.70 appears to be solid and it is now approaching the 6 month trend line support. The RSI has stopped falling and is moving sideways and the MACD has gone flat. Thursday’s uptick in volume is also promising. A continued hold sees resistance above at 126.40 and then 129.40 and 132.12. If it does not hold the 123.70 support or eh trend line then it seems destined for 121.75 and the area from 118.80 to 119.50 below that.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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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.

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