4 Forex ETFs: Two to Ditch, Two to Embrace (FXB, FXS, BZF)

Let's be honest: In this era of depressed developed market interest rates and hot printing presses, the currencies that once looked like "reserve" or "safe haven" currencies may not be worthy of such acclaim. Remember, the U.S. dollar is NOT the currency of a AAA-rated country. Nor is the Japanese yen and it may take years, if not decades before some Euro Zone nations get an AAA rating again. Translation: These days, it's just as important to know what forex ETFs to avoid as it is to know

. To that end, we're going deeper than telling folks it's wise to avoid the CurrencyShares Euro Trust

or consider the ProShares UltraShort Yen

. Consider this the Forex Final Four: Two to love, two to avoid.

Avoid and we say that acknowledging that on a technical basis, the chart of the CurrencyShares British Pound Sterling Trust isn't all that bad. So why is sterling not looking so sterling right now? Well, the U.K. is flirting with recession or may already be there. From iShares' Russ Koesterich: "...economic conditions in the United Kingdom are deteriorating. Expectations for UK growth have decreased over the last six months, and UK corporate sector profitability has dropped since the end of last year. In addition, UK mortgage rates have increased and unemployment remains at a 17-year high, headwinds for an economy where household spending accounts for roughly 2/3 of gross domestic product." At the end of the day, the pound is a risk on currency, but FXB might have trouble finding support for the risk on cause. There is a bull case for the pound and it exists in the form of U.K. stocks being expensive, according to Koesterich, and the fact that the Bank of England probably doesn't engage in another round of quantitative easing.

Avoid not just because BZF has lost more than 5% in the past month and has a chart that is screaming more declines are on the way. Demand for the real has been strong the folks in Sao Paulo don't like that. Brazil's central bank is looking to cool demand for the real and the government extended a tax on incoming foreign loans to a period of up to five years, from three years previously, in an effort to temper demand for the real, according to the Wall Street Journal. Not to mention, with Brazil's GDP growth looking decidedly un-emerging market, the interest rate cuts are definitely on the table to spur growth and that could also weaken the real.

Embrace, but only if you're willing to embrace. That much should be implied by the name of this ETF and if the message isn't sent there, then have a look at CCX's chart. We're not going to lie; that was a nasty gap lower to start 2012, but gaps do get filled in and CCX is higher by almost 6% year-to-date. CCX's holdings are subject to change without notice, but at the moment, eight countries are found in the fund, with Brazil being number eight. That could be a drag, but the dollars of Canada, Australia and New Zealand, roughly 37% of CCX's weight, could drive this fund higher.

Embrace, but it might be best to wait for a test of support at $142 because FXS' chart shows a series of lower highs and the ETF is trading below its 50- and 200-day moving averages. Sweden just lowered interest rates and that hurt FXS, but the ETF also move in unison with the tenor of European bailout news even though Sweden isn't in the Euro Zone. A strong credit rating, steady economic growth and minimal chance of sovereign default make FXS an appealing play.