How to Trade Currency ETF’s and Impress Your Hot Neighbor

Currency trading is getting more popular and with the advent of currency ETF’s anyone can show up at a party and impress your friends with your new found skills. Now as a primer, all the cool kids are trading the Aussie Dollar (Australian Dollar), Kiwi (New Zealand Dollar), Loonie (Canadian Dollar), Cable (British Pound), the Euro or the Japanese Yen. Trading these will get you into the conversation and maybe make some head way with that hot neighbor you have your eyes on. But I will let you in on a dirty little secret. The currency exchange with our other neighbor, the one to the South, that stirs so much controversy politically, offers a great opportunity to make money, not just talk about it. The chart below of the Currency Shares Mexican Peso Trust, $FXM, is primed to move higher. After the move up from 71 at the end of the year to the top at 79 in early February, it pulled back in a wide bull flag before moving higher just 3 weeks ago. Now it is consolidating those gains

at resistance in another tighter bull flag. This is where it gets good. A move above that flag triggers a Measured Move to 81.50 and a larger Measured Move above that to 86. It is not a coincidence that those levels have meaning. 81.50 is right at the August high and 86 where the consolidation occurred through may into August before the fall. So will it break higher, that is the key? Well the Relative Strength Index (RSI) is bullish and supports a move higher while the Moving Average Convergence Divergence (MACD) indicator is positive also supporting upside. So now you have a choice to make. Are you smooth enough to enter that party and talk about all the old standard currencies, taking your chances. Or are you more the take charge type that armed with bags full of Mexican Peso gains is ready to storm in and walk out with your prize. The choice is yours.

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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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