Currency Futures Trading A Technical Weekly Preview 1/24/10
Posted by: Richard Estrada // Category: Currency Futures Trading
What can currency traders expect this week in the currency futures market? The answer is simple, who knows. Currency Traders last week saw some big reversals off significant areas of technical support, while other currency markets went through keys areas of technical support like a tank through a brick wall.
Let’s first take a look at the British Pound weekly chart (below) and try to determine key areas of technical support and resistance. You can see that the British Pound is currently trading within a bear flag technical formation (outlined in black), which may make a break below the bottom of this formation technically significant.
The March 2010 British Pound futures contract (below) clearly illustrates the sell-off that began last Tuesday after the market ran to 1.6454. The technical question when looking at this daily chart is can the bulls hold the line in the vicinity of the 25-day moving average (blue – 1.6111), or are the bears in position to roll right through this area of projected technical support?
The Canadian Dollar like the British Pound also fell last week and is currently trading at a projected area of technical support (see weekly below).
You will notice that this area of projected technical support is actually the 13-week moving average (blue – .9456), which has acted as a pivotal area of technical support since early 2009. A significant break through this area and the bears might be in position to make a run at the 52-week moving average (green – .8910).
The March 2010 Canadian Dollar futures contract (see chart below) shows the strong downward move that began last week.
This daily chart of the Canadian Dollar (above) shows that the bears were able to push this market through key areas of technical support and now the question is can the bears hold the market below these areas of previous support, or will the bulls be able to regroup and make a stand?
The weekly chart of the Euro Currency (see chart below) clearly shows that the bears were able to push the market right through the last cycle low of 1.4215, but were stopped dead in their tracks at the 52-week moving average (green – 1.4012).
The daily chart of the March 2010 Euro Currency (below) shows that the bears were able to bust right through the bottom of a bear flag technical formation (outlined in black) and now the question is will the bears be able to maintain this downward momentum, or will the bulls try and hold the line in the vicinity of the 52-week moving average (1.4012)?
The weekly chart of the Japanese Yen (see chart below) shows an explosive move from the area around the 52-week moving average (green – 1.0681) a few weeks back.
The question now is will the bulls be able to maintain this upward momentum, or can the bears find an area from which to counter? The daily chart of the March 2010 Japanese Yen futures contract (below) shows that the Japanese Yen exploded through both the 5-day moving average (red – 1.1055) and 75-day moving average (green – 1.1095) on Thursday and Friday of last week. These two averages I will consider pivotal areas of technical support and good gauges of technical momentum.
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There is significant risk of financial loss in trading futures and trading futures is not suitable for everyone. You should carefully consider whether such an investment is right for you in light of your financial condition.
Tags: british pound, CAD USD Futures, canadian dollar, currency futures, Currency Futures Trading, day trading futures, euro currency, japanese yen
