Is The U.S. Dollar Making A Top? (UUP, FXB, FXE, FXY)

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March 22, 2013 4:53pm NYSE:FXB NYSE:FXE

dollar etfPatrick MontesDeOca: After the Bank of England Governor Mervyn King signalled concern regarding the value of US currency, the British Pound rallied against the US dollar (NYSEARCA:UUP) and closed above $1.51.


“We’re certainly not looking to push sterling down,” King told ITV News in an interview Thursday night, saying the pound was probably near a “properly valued” exchange rate.

The US dollar remained weak in the face of data showing that overall consumer prices rose more than previous estimates had expected, although the core measure of inflation was right on target. US consumer prices jumped 0.7% in February, led by a surge in gasoline prices. Economists had forecast a 0.6% increase. The core measure, which strips out food and inflation, rose 0.2%, in line with expectations.

The dollar index (DXY -0.54%), which measures the greenback against six other currencies, traded at 82.277 compared with 82.605 in late North American trading on Thursday. The WSJ dollar index (XX:BUXX -0.55%), which measures the greenback against a wider currency basket, fell to 73.26, down from Thursday’s close of 73.56.

The euro (EURUSD +0.0105%) traded at $1.3093 compared to Thursday’s $1.3003. As Eurozone finance ministers gathered this weekend to discuss Cyprus’s long-stalled bailout, there is very little optimism that Italian politicians will be able to put together a long-term durable government.

Against the Japanese yen (USDJPY +0.0076%), the US dollar slipped to ¥95.96 from ¥96.10 the previous day. On Friday, Haruhiko Kuroda — seen as dovish on monetary policy — was confirmed as the new governor of the Bank of Japan after the upper house of Japan’s parliament approved his appointment.

Let’s take a look at the currency shares trust ETF’s and see if we can identify some trading opportunities for next week.

FXB Currency Shares B Pound Trust ETF

The B Pound Trust ETF (NYSEARCA:FXB) closed at 1.4918. The market closing below the 50 MA (1.5386) is confirmation that the trend momentum is bearish. With the market closing above the VC Weekly Price Momentum Indicator of 1.4859, it confirms that price momentum is bullish. Look to take some profits, if long, as we reach the 1.5034 and 1.5149 levels during the week. Buy corrections at the 1.4743 to 1.4569 levels to cover shorts and go long on a weekly reversal stop. If long, use the 1.4569 level as a SCO/GTC (Stop Close Only and Good Till Cancelled order).

FXE Currency Shares Euro Trust

The Euro Trust ETF (NYSEARCA:FXE) contract closed at 1.2954. The market closing below the 50 MA (1.3153) is confirmation that the trend momentum is bearish. With the market closing above the VC Weekly Price Momentum Indicator of 1.2917, it confirms that the price momentum is bullish. Look to take some profits, if long, as we reach the 1.3015 and 1.3076 levels during the week. Buy corrections at the 1.2856 to 1.2758 levels to cover shorts and go long on a weekly reversal stop. If long, use the 1.2758 level as a SCO/GTC (Stop Close Only and Good Till Cancelled order).

FXY Currency Shares Japanese Yen Trust

The Japanese Yen Trust ETF (NYSEARCA:FXY) contract closed at 1.0275. The market closing below the 50 MA (1.1724) is confirmation that the trend momentum is bearish. With the market closing above the VC Weekly Price Momentum Indicator of 1.0246, it confirms that the price momentum is bullish. Look to take some profits, if long, as we reach the 1.0336 and 1.0396 levels during the week. Buy corrections at the 1.019 to 1.01 levels to cover shorts and go long on a weekly reversal stop. If long, use the 1.01 level as a SCO/GTC (Stop Close Only and Good Till Cancelled order).

This article is brought to you courtesy of  from Equity Management Academy.


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