Currency Futures Trading Weekly Review Saturday 1/30/10
Posted by: Richard Estrada // Category: Currency Futures Trading
The Currency Futures Markets were explosive this week with some incredible short-term spikes and reversals. Once again for Day Traders looking for volatility or price action then the currency futures markets didn’t disappoint. The British Pound continually tested a technical support area, before finally collapsing, while the Canadian Dollar and Euro Currency just tumbled this week. The Japanese Yen on the other hand started the week strong, climbing to new daily cycle highs, but by Friday the bears seemed to have seized control.
The question for currency traders going into next week is what will happen on Sunday night and Monday morning. The answer to that question is simple, who knows. What we do know is that the March 2010 British Pound futures contract (see chart below) did break below a pivotal area of technical support and appears poised to test the next cycle low at 1.5718. The question is can the bears keep up the pressure, or will the bulls look to make a stand and play for a reversal?
And what about the Canadian Dollar? The daily chart (see chart below) clearly shows that the area to watch is the 5-day moving average (red .9395), which is where the bears have been holding as a technical resistance area. Therefore, in my technical opinion this average might be a good gauge of technical momentum this week.
Now let’s take a quick look at the Euro Currency. The daily chart of the March 2010 Euro Currency futures contract clearly illustrates a significant sell-off from the bottom of a bear-flag technical formation (outlined by black trendlines). Also notice that the bears were able to blow right through the 52-week moving average (1.4035), which in my opinion was a pivotal area of technical support. The question now is can the bulls find a place in the market where they might make a stand, or are the bears going to continue and punish any support this week?
Finally let’s take a look at the Japanese Yen. The daily chart of the March 2010 Japanese Yen (see chart below) shows that the week started with the bulls utilizing the area in the vicinity of the 5-day moving average as a launching pad to new short-term weekly highs. But by Thursday this area of the market had given way and the bears had seized control. The question now is who will be in control next week, the bears or bulls?
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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.
