Below we highlight our trading range charts for four currency ETFs -- The Mexican Peso (FXM), Euro (FXE), Japanese Yen (FXY), and US Dollar (UUP). For each chart, the light blue shading represents between one standard deviation above and below the 50-day moving average. The top of the red shading and bottom of the green shading represent between two standard deviations above and below the 50-DMA. A move into the red zone is considered overbought, while a move into the green zone is considered oversold.
As shown, the Mexican Peso has been on fire lately. FXM is now trading just above its red zone, which has previously been a point of resistance in recent months. The US Dollar (UUP) traded at a level that the Peso is currently trading at just a few days ago, and it quickly pulled back. UUP is still in a nice uptrend channel, however. The Euro (FXE) has been stuck in a nasty downtrend over the last six months. It recently bounced off of the bottom of the green zone, but it still has some work to do to break its downtrend. Finally, the Japanese Yen (FXY) just broke below a key support level and is trading well into oversold territory. Buying once key support gets broken can be like catching a falling knife, but the Yen is so oversold at this point that some buyers may be tempted to step in.
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