Daily FX: Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Long dollar-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

US non-farm payrolls disappointed on Friday but dollar-yen closed the week above ¥98.80, the condition necessary to enter a long position. I took ¥99.10 at the close on Friday; and the news that Tokyo would host the 2020 Olympics has helped lift dollar-yen as high as ¥100.11. The resilience of the pair in the wake of the weak US labour report bodes well for the future. Technically, I am keeping my stop under the non-farm payroll reaction low at ¥98.55; if it trades below, a more significant turnaround could be emerging.

STRATEGIST
ILYA SPIVAK

My pick: Long Aussie-dollar
Expertise: Global macro
Average time frame of trades: 1 to 6 months

I’ve been looking for the Aussie dollar to rise, as stabilisation in Chinese news-flow improves the Reserve Bank of Australia (RBA) policy outlook, with traders no longer pricing in further easing in the coming 12 months. Meanwhile the latest data shows net speculative shorts near a record high, hinting at vulnerability to profit-taking. Last week’s RBA announcement served as a catalyst for the move higher as expected and I will stay long, aiming for $0.9640.

CHIEF STRATEGIST
JOHN KICKLIGHTER

My pick: Short sterling-dollar and euro-yen, long euro-Kiwi dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

The market passed a major opportunity this last week to see risk trends retake the helm. We may still see it set in this week, but the key Fed decision next week will maintain doubt. Should risk aversion kick in before the event risk, I’ll look for the euro-yen trendline break below ¥129.50. Sterling-dollar is in a 120 pip range that would play best on a $1.5550 trendline break. Less risk prone, euro-New Zealand dollar has bounced off a major three-month trend channel floor.