Trading Currency Futures CAD/USD GBP/USD

Trading currency futures can be both an intra-day and an inter-day activity. We will look at two charts that are showing a possible upcoming bearish MACD divergence. If the MACD divergence follows through it may not be a big decline, but it should be good for a few cents. The charts we are going to look at are both daily charts. One is for GBP/USD futures (British Pound against the US Dollar), and the other is for CAD/USD futures (Canadian Dollar against the US Dollar).

First, let us examine the GBP/USD currency futures trading chart.

In this currency futures chart we are seeing GBP prices approaching the previous recent high of 1.59. However, we can also see that MACD histogram levels are significantly lower than they were during the previous recent high. If this MACD divergence completes itself, I will take it as a shorting signal and I will most likely sell the GBP/USD. As always, I will employ the use of safety stops, just in case the trade does not go as planned. I will be watching this futures contract very closely next week.

Second, let us examine the CAD/USD currency futures trading chart.

In this currency futures chart we are seeing CAD prices approaching 1.0060 price highs of the last recent high. Just as with the GBP futures of the last chart example, we are seeing prices approaching recent highs while the MACD is failing to follow suit. This is indicative of a bearish MACD divergence. As with the GBP, I will be watching this futures contract very closely next week looking for a shorting opportunity.

I do most of my trades on 60 minute charts, and generally they don't take very long to complete. A 24 hour trade is usually a little bit on the long side for my trades. However, with the two examples mentioned above, I would expect that a trade would last a little longer, maybe between two days and two weeks since they are based on daily time frames. That being said, I will still use 60 minute charts to pinpoint my entry. Chances are, there will be a strong MACD divergence indicating topping action on the 60 minute charts as prices are also completing the daily MACD divergence.

With impeding war with Iran, we can expect strange things to happen in the world currencies. Remember, trading currency futures can be unpredictable, so always use loss mitigating strategies like stops and exit targets.

Learn about Trading Strategies like MACD Divergences

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