Showing posts with label Currencies. Show all posts
Showing posts with label Currencies. Show all posts

Thursday, January 29, 2015

Cash In On The Currency Wars Using ETF's ?






Summary


  • Currency ETF's are becoming volatile as'Currency Wars' expand.

  • The US Dollar strength is impairingsales and profits for manufacturers.

  • European politics is creating turmoilfor the Euro and that will impact many currencies.

  • We have tools and alternative tools toexploit fluctuations in currency ETF's.


Let's have a look at this chart I haveconstructed using Relative Strength factor of a US Dollar IndexETF(UUP) and six ETF's which are used to make up the US Dollar Index.

The six US Dollar Index component ETF'sI have selected are Guggenheim FXF,FXB,FXC, FXC, FXY, FXSrepresenting Swiss Franc, British Pound, Canadian Dollar, JapaneseYen, Euro, Swedish Krona.









You may ask, 'What good is thiscomparison chart?'


At some point the distances betweenthese plots will start to narrow based on the actions of the variousgovernments and markets and whatever manipulations may occur in orderfor different currencies to gain or lose advantages.

We need only look at what has occurredin the past couple of weeks with the Swiss Franc, the Canadian Dollarand the Euro.

This next chart reflects the RelativeStrength factor of the seven Etf''s that I am using, you can see thatFXF, Swiss Franc, is outperforming the other component currency ETF'sand that is based on the sharp move generated by Swiss governmentintervention a few days ago.







How can we use this chart?

Interestingly enough, each governmentinvolved as well as the EU is attempting to capture markets and theyare going to do their best to manipulate their own currency and anyother currency to their advantage. Volatility in currencies as wellas stocks is being created daily with the manipulations.

I gathered some information from Pointand Figure charts at Stockcharts.com and am going to list the targetprices for each of these currency ETF's. The numbers may surpriseyou.

FXF 151.00
FXB 210,00
FXC 84.00
FXY 62.00
FXE 86.00
FXS 82.00
USDX 128.00 (P&F target for UUPunavailable)

From those targets you can see hugedifferences from prices today, there will certainly be some activityas months pass. P&F targets are not guaranteed, I used them onlyas an illustration.

What can we use to take advantage ofthese pending moves. There are many choices , however UUP and UUD maybe quite suitable for most people as those represent long and shortrespectively. Some may favor using the PowerShares 3x Long UUPt orthe PowerShares 3x Short UDNT.

I have compared the four of these asfollows.












Using Relative Strength factor forcomparison is most useful for trade selection and also trademanagement and may add another dimension to your trading system.

Tuesday, January 27, 2015

9 Currency ETF's That May Influence Your Trading Strategy



Many Forex Traders and Investors have asizable interest in what may be happening to various currenciesregarding their trading strategy. Today I will gather someinformation on a group of ETF's related to several of the heavilytraded currencies.

  • Currencies are volatile today and will be more volatile as weeks pass.
  • Countries are manipulating their currencies to gain advantages and export markets.
  • Politicians are exploiting interest rates and QE programs to stimulate their economies


The following are the Guggenheim'CurrencyShares' Trust Vehicles:

Australian Dollar (FXA)
Canadian Dollar (FXC)
Euro (FXE)
Japanese Yen (FXY)
British Pound (FXB)
Swedish Krona (FXS)
Swiss Franc (FXF)
Singapore Dollar (FXSG)
Chinese Renminbi (FXCH)


As you can see, this list covers theimportant and most heavily traded currencies exclusive of the USDollar.

In another article I will explore therelationships of each of these currencies with the US Dollar.

Here is a chart from ETFScreen.comoutlining a comparison of the Relative Strength factor for the pastquarter. Of course, as each day passes there will be changes inRelative Strength factor and the order in the list will change.





This next chart illustrates acomparison in percent change for the past several months, I amassuming that the down slope is closely related to the climb in theUS Dollar.





This chart, from etf.com illustratesthe fund flows into each of these ETF's for the past month.






Of course we want to know what is inthe future for currencies and that is not easy to know, there havenot been many successful forecasters. However, there is one school ofthought that we can consult and that is based on past performance.

Point and Figure Charts are not theholy grail, however they have a good track record and for thispurpose they will cast some light on future direction.

Here is the P&F chart for FXA, theAustralian Dollar Trust, I point out the Bearish Price Objective.




Instead of posting a P&F Chart inhere, I will list the Price Objective (as at January 23,2015) foreach Currency ETF.(Source Stockcharts.com)

Australian Dollar (FXA) 70.00
Canadian Dollar (FXC) 84.00
Euro (FXE) 86.00
Japanese Yen (FXY) 62.00
British Pound (FXB) 210.00
Swedish Krona (FXS 82.00
Swiss Franc (FXF) 151.00
Singapore Dollar (FXSG) -
Chinese Renminbi (FXCH) -

(FXSG and FXCH unavailable)



I will be updating the information on each of these currencies and ETF's in coming days.









Wednesday, August 20, 2014

Forex Wrapup as at August 20, 2014

Perhaps we will have to adjust our trading strategies very soon..
We have a couple articles here by some recognized experts in currencies, Marc Chandler and Dean Poppelwell. Both of these authors have been involved in currencies for a number of years and have developed an acute sense as to what may be occuring in the markets at this time.
Their articles will provide some decision making information for our longer term  trading strategies
EMU External Account Reviewed
Category: FXE,Marc Chandler Wednesday, August 20, 2014 10:16:20 AM
By Marc Chandler:
The euro area reported its current and financial accounts for the month of June. Combined they make up the balance of payments.
Traditionally, under the gold standard, the current account would be balanced by capital flows and the transfer of gold claims.
In the modern era, some economists emphasize the basic balance in explaining (and forecasting) currency fluctuations. The basic balance is the current account plus long-term capital flows. The assumption is that short-term capital flows are noisy, influenced by cyclical factors, while long-term capital flows are thought to be the true signal, reflecting underlying productivity.
Yet, it often seems that the long-run is a series of short-run disruptions, and that in any kind of time frame relevant for investors and speculators, cyclical considerations are significant. Moreover, currencies deviate in terms of both direction and magnitude for extended periods. It is there are a number of other balances that currencies

Complete Story »

Category: FXA,GDAY,CROC,Dean Popplewell Wednesday, August 20, 2014 1:47:52 AM
By Dean Popplewell:
By Stuart McPhee
AUD/USD for Wednesday, August 20, 2014
The Australian dollar is threatening to break through the support level at 0.93, after recently falling sharply from above 0.9340 in recent hours. Over the last month or so, it has generally been sliding lower from close to 0.95 down to its present trading levels around 0.93. A couple of weeks ago the Australian dollar surged higher to a one week high near 0.9375, before easing back and then falling sharply. It has done well of late to cling onto the 0.93 level after its sharp fall which saw it move from above 0.9400 down to a seven week low below 0.9240. A few weeks ago it was easing back below both the 0.9425 and 0.9400 levels with the former providing some resistance. The Australian dollar reached a three week high just shy of 0.9480 several weeks ago after it enjoyed



Category: FXE,FXB,FXY,FXA,UUP,UDN,Marc Chandler Wednesday, August 20, 2014 7:32:27 AM
By Marc Chandler:
The US dollar is posting gains across the board. It has risen above JPY103 to its best level since early April. The euro has been pushed through the $1.33 and is at its lowest level since last September. The greenback is also edging higher against the dollar-bloc and most emerging market currencies.
Sterling is the main exception. It also had been under pressure, slipping to $1.6600, but two dissents in favor of an immediate rate hike at this month's MPC meeting sent sterling quickly higher (~$1.6680), before sellers re-emerged. The dissents came from the MPC's external members Weale and McCafferty. There had been some speculation of 1-2 dissents, though we were skeptical.
UK interest rates rose a few basis points across the curve, and this lent sterling support. However, data out since the MPC meeting indicates, coupled with the tone of the minutes, ensures Weale and McCafferty stay in



 Category: UUP,UDN,FXE,FXY,FXB,FXC,FXF,FXA,NZDS,Dean Popplewell Wednesday, August 20, 2014 7:27:24 AM
By Dean Popplewell:
By Dean Popplewell
Currently, the central banker remains at the 'core' for most of the forex moves. Governor Stevens at the RBA is trying hard to jawbone his own currency, the Aussie dollar, lower. The 'chameleon' Governor Carney at the BoE seems to be confusing investors with some hawkish weekend copy, combined with dovish comments delivered last week, is complicating the pound's direction this week. Thrown into the mix is an MPC dissenter or two, and if nothing else, policy makers are certainly providing investors with price movement opportunities.
Even stateside, the investor is looking to the policy maker for guidance. The FOMC will release the minutes from its last meeting later this afternoon. Expect the market to downplay the event; instead dealers prefer to look to the annual symposium on monetary policy in Jackson Hole this Friday for market direction. The FOMC minutes will certainly indicate what happened a