August 21, 2017

Currency ETFs – Whats Hot and Whats Not with Forex?

For those that like to trend trade Currency ETFs, there has been some exciting times in Forex recently.

The Foreign Exchange market is the fastest growing market, with 4 Trillions dollars exchanging hands every day.

So lets get straight into it, and take a look at what is driving the strong trends in the Currency Markets, and where we are at exactly, with the following Currency ETF:

UUP - US Dollar Index Currency ETF

US Dollar Index - UUP

Because of the overall weakness in the US Dollar, as shown by the bear trend in the chart above, many of the world currencies have thrived in recent months.

As of the 22nd of October, the Percent R system, is signaling UUP is still in a Bear Trend on the daily chart, but has had a Bear Retest at 22.72 as circled on the chart above.

So a close above that level would signal an exit of the current down trend.

Currently GTT is still mildly bearish on UUP, but read below for more info.

Update (31/10/10) : As of the 27th of October UUP has signalled an exit, which moves UUP to a Neutral bias, for the short term.

FXA - Australian Dollar/US Dollar Currency ETF

Australian Dollar / US Dollar - FXA

For those that have followed the Aussie Dollar recently, you would know its been in a strong bullish trend for a month and a half, thanks to a weak US Dollar.

Last Tuesday we saw FXA signal a Percent R Bull Retest, and again two days later on Thursday, signaling a Low- Risk Entry Point. As of Friday the Bull Trend is still hanging in there, rising on declining volume, but a close below 97.69 would signal an exit on the daily chart.

Currently GTT is still mildly Bullish on weakening FXA.

Update (31/10/10) : As of the 27th of October FXA has signalled an exit, with a violation of the stop mentioned above, which moves FXA to a Neutral bias for the short term.

FXB - British Pound/US Dollar Currency ETF

British Pound Sterling / US Dollar - FXB

Now lets take a quick look at the British Pound, and the chart doesn't lie. Although FXB has enjoyed a small uptrend with 2 Percent R Retests, the trend structure has now broken down and signaled a exit on the 19th of October, as circled on the chart above.

So GTT is now Neutral on FXB.

FXE - Euro/US Dollar Currency ETF

Euro / US Dollar - FXE

Out of all the currencies I will review today, the Euro has definitely enjoyed an amazingly strong bull trend over the last month.

On Tuesday, FXE signaled a Percent R Retest, which was a down day for all currencies across the board (on US Dollar strength). As of Friday the Euro Bull Trend is still hanging in there, but a Close below 136.64 would signal an exit.

GTT is Bullish on FXE.

Update (31/10/10) : As of the 27th of October FXE has signaled an exit, with a violation of the stop mentioned above, which moves FXE to a Neutral bias.

FXY - Japanese Yen/US Dollar Currency ETF

Japanese Yen / US Dollar - FXY

If you have seen Japanese Yen traders dancing in the streets lately, its because of an amazingly strong trend over the last month.

FXF has been in a very strong Bullish Trend recently, and has not even signaled a Retest of the current Bull Trend like the other currencies.

GTT is Bullish on FXY, as it has been the most resilient of all the Currency ETFs recently.

Update (31/10/10) : As of the 27th of October FXY has signaled an exit, with a violation of the Retest level in recent days, which moves FXY to a Neutral bias.

FXF - Swiss Franc/US Dollar Currency ETF

Swiss Franc / US Dollar - FXF

Swiss Franc traders have enjoyed a long Bull Trend recently, longest of all Currency ETFs discussed here.

As always Percent R has been great telling us when to go long, and also some Low-Risk Entry Points on the way, with the Percent R Retests.

FXF, as of Friday broken down on Percent R and signaled and exit.

So GTT is now Neutral on FXF.

Conclusion

After studying the Monthly, Weekly & Daily charts, its apparent that most of the Currency ETFs have enjoyed strong trends recently, in a relatively short time. All this because of the weakness in the US Dollar, so this has been the main driver in all the trends discussed above.

The UUP ETF (US Dollar Index) is running into long term support at 22, so we may see price action blow some steam off, and a trend change in the short term (likely sideways). The US Dollar is seeing a serious battle between the Bulls and the Bears at the moment, and it would take a seriously weak US Dollar to continue breaking lower in the current short term trend.

It's not out of the question, but I expect the chart with tell is within days, the current strength of the US Dollar.

Update (31/10/10) : With the recent strength of the US dollar as predicted, most Currency ETFs have signaled an exit on the daily chart. So I am now Neutral on all currencies, for the short term.

Happy Trading,

Trend Hunter.

www.globaltrendtraders.com © 2009-2010

Comments

  1. It has been very interesting watching the Forex market and seeing the drop in the US Dollar but also it is great for me as an importer from America to see the Aussie Dollar go up.

    Lets hope the strength of other Forex markets, but the weakness of the USD is not leading to a 2nd GFC…..

  2. I have been reading a lot on here the topic Currency ETFs – Whats Hot and Whats Not with Forex? — Global Trend Traders inspired me, i have picked up some really great ideas. Thanks and i hope to see more soon.

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