Currency Traders saw some extreme reversals in today’s currency futures market. Once again currency futures trading isn’t for the meek or garden-variety-investor whose idea in regard to trading is the old buy and hold mantra of the last century. In my opinion, as a currency trader day trading currency futures you need to be nimble and well versed in technical analysis, that is if you want to have any kind of chance of surviving this day trading game.

So, let’s now take a look at some of these extreme reversals. The daily chart of the March 2010 British Pound futures contract (see chart below) shows that the British Pound was able to get back above the 5-day moving average (red – 1.5984) last night, which I considered a pivotal area of technical resistance.

But by morning the British Pound was in a free fall and any currency day trader that bought the top last night or early this morning was in trouble by mid-morning. The question now is can the bears keep up the technical pressure, or will we see an extreme reversal from the early night market lows?

Just like the British Pound the March 2010 Canadian Dollar futures contract (see chart below) also rallied from the open on Tuesday evening, but ran right into technical resistance at the 75-day moving average (green – .9486). From there the market just tumbled, but did find technical support at the 5-day moving average (red – .9401). 

The question for currency trader’s trading in the Canadian Dollar is can the bulls hold the line in the vicinity of the 5-day moving average (red – .9413), or will the bears try and keep up the downside pressure?

The daily chart of the March 2010 Euro Currency futures contract (see chart below) shows that the Euro Currency rallied and actually took out last Friday’s high (1.3988) last night climbing to 1.4026. Once there the market looked like a rocket that ran out of fuel and then just plummeted back to earth.

The question for currency day traders day trading the Euro Currency Futures is will the bears make a push at the low of the week (1.3851), or will the bulls look for technical support and try an extreme reversal of their own?

The daily chart of the March 2010 Japanese Yen futures contract continues to show this market consolidate between both the 5-day moving average (red – 1.1036) and the 25-day moving average (blue – 1.0977). The question for currency futures traders is still the same, is this a pause in a prevailing upward trend, or is this downward move a continuation of a larger downward trend?

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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.   

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