A Recap of the Currency Action in the CDZ09 on 9/28/09

Discussion in 'Financial Futures' started by Rae, Sep 29, 2009.

  1. Rae


    The Canadian Dollar pierces the 13-week moving average (.9113) Sunday night, before reversing in the late morning. The CD 5-minute chart shows consolidation between .9094 and 9130 for several hours. This is the area where from which I launched three simulated trades. These simulated long positions were based on two simple technical points, which I wrote about in Monday's Currency Futures Trading Report.

    The 1st Technical Point

    "On the CD 60-minute chart (below was posted on 9/26/09) I have illustrated a downward channel (outlined in black) that the Canadian Dollar has been trading within for the last two weeks. I would like to point out that the top of the channel is in very close proximity to the projected 5-day moving average (.9239), which would be an upside target that would be consistent with the current downward cycle."


    The Second Technical Point

    "A currency trader could also look to buy the Canadian Dollar within the vicinity of the 13-week moving average (.9113) if the market breaks to the downside first on Sunday night. Because this area has been a pivotal area of technical support over the last several months any break below this average could be a disaster for traders buying the market below this area. So, I would recommend tight stops just above last week's low of .9105."

    The 60-minute chart [below posted on 9/28/09) clearly illustrates a rather large move that began just .0019 ticks below the 13-week moving average and rallied to just below the 5-day moving average. Once again, past performance isn't indicative of futures results, but the analysis in Monday's Currency Futures Trading Report was a rather good framework from which to trade the markets. It's my opinion, by creating trading ideas based on potential market movement, can give a trader the confidence to execute, manage and exit a position.


    So, what technical clues can we take from Monday's action? What question can we ask that may help us determine where the battles might be waged? Send me an email or private message and I will forward you my daily currency futures trading reports.

    There is signficant risk of financial loss when trading futures and past performance is not indicative of future results.