DailyFX: Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Short euro-dollar and pending short Aussie-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

The European Central Bank (ECB) meeting, the third quarter US GDP figure, and the October US non-farm payrolls (NFP), all generated immense volatility in euro and dollar based pairs. With the euro-dollar $1.3440 range support breaking on the ECB, a short was taken at $1.3439; and after a weekly close under $1.3400, stops have been moved to entry to curtail risk. Concurrently, with the Aussie-dollar starting to lead to the downside after NFPs, I’m looking for a break under last week’s low to signal further losses mid-November on the back of rising US yields.

STRATEGIST
ILYA SPIVAK

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

Much has been made of the Fed’s delay in tapering QE, but its policy trajectory stands in stark contrast to that of the European Central Bank (ECB). Not only is the ECB far from scaling back accommodation, but a further expansion of stimulus seems likely – considering that last week’s surprise rate cut has limited capacity to truly ease credit conditions (market rates traded below the ECB benchmark months before the cut). I’ve entered short at $1.3362, initially targeting $1.3148. A stop-loss is set to trigger on a weekly close above $1.3577.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

Both my short euro-yen ¥132.50 break and long New Zealand dollar-dollar above $0.8300 worked out last week – a sign of mixed risk sentiment. But for lasting trends, we need persistent themes. I still like a sterling-dollar range break below $1.5900. I am also shorting the former euro-yen trendline support around ¥132.80, as new resistance would cater to risk aversion and euro fundamental issues. At a 50 per cent Fibonacci, I also like euro-dollar breaking $1.3300, though it’s a bit mature.