The euro currency futures have made a big break for the end zone during Super Bowl XLVII week, but could be potentially overbought at this point in my opinion, writes Matt McKinney of Zaner Group.

Fundamentally, this breakout in my opinion, occurred on January 21 when more European banks (276) announced that they where going to pay more money than expected back to the ECB from the earlier stimulus packages. Up until that report the 6EH3 was trading in a range and the bulls and bears where fighting it out for about a week, after the bank news, then the breakout came to the upside and the bulls won out. After that some economic reports came out in Europe and Germany that helped add to the euro's climb higher towards Super Bowl XLVII.

A few of the data reports I read in Bloomberg where, "A drop in Eurozone unemployment and better than expected readings for private surveys of Eurozone and German manufacturing have helped to reinforce this current rally, with a weaker than expected reading on French manufacturing creating little, if any, reaction from the market. While export-driven industries throughout the region cannot be happy with their currency at 14-month highs...." So, this is a great start, in my opinion, if you are bullish euro. For the banks and the economic data, right now, it looks pretty good for the European debt crisis.

Technically, this market in my view is in a super trend up and that is indicated to me because the 9-day simple moving average (SMA) has crossed over the 20-day simple moving average (SMA), as both indicators are pointing up on sharp angles and the euro futures prices are trading above the 9-day SMA.

My concern for the market being a little overbought is that on Friday 2/1/13, the last bar on this chart went all the way above the top Bollinger Band (BB) and couldn't sustain the high and ended up closing below the top line of the BB, which is the resistance point according to my indicators.

Also, the market is very high above the 9-day SMA, which is now support on the chart. It should pull back at some point, but when is the question. In my view, markets can remain overbought for long periods of time, especially when they have strong bullish fundamentals and technicals.

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Option Plays
Some potential plays could be to buy bull call spreads and/or outright call on April euro currency futures, if we still believe the trend is going up.

I like to recommend to my clients to trade with the trend instead of trying to pick a "top" or a "bottom." When we are bullish, we look at buying calls or call spreads. We also look to buy, in a 3 to 1 ratio, a put for protection, in case the market makes a major move against us. Because a quick move down could\ really hurt the value of our calls while our puts could go up and help us like insurance or a hedge.

Disclosure: This is an options play article not designed for futures, so please do not use this as a trade recommendation to trade futures.

By Matt McKinney of Zaner Group