DailyFX: Analyst picks


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

The sterling-yen long from net ¥160.80 remains in play and, after considerable upside over the past few days, I have moved up my trailing stop. Previously, it was held at ¥162.52, below the daily 8-EMA. Accordingly, using the same trailing method, my stop has been moved up to the daily 8-EMA today at ¥165.80. Also, sterling-dollar has broken out of its $1.5880 to $1.6260 range. If consolidation is a bull flag, the 61.8 per cent extension of the move comes in at $1.6750. Indeed, sterling looks bullish headed into December.


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

Looking past near-term volatility triggered by conflicting jawboning efforts from central bank officials, the trajectory of Fed policy – looking to reduce stimulus by tapering QE asset purchases at some point in 2014 – stands in stark contrast to that of the European Central Bank. A shallow rebound from November lows, mounted after prices were sent downward, now looks to be running out of steam. I will look for technical confirmation on a weekly close below $1.3524 to enter short, targeting $1.3148 initially.


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

We are heading into the “quietest” month of the trading year – something that will further distort an already mixed market on fundamental drivers and catalysts. Nevertheless, the focus on stimulus and a return to risk trends can stir opportunity. A euro-sterling break below channel floor and 50 per cent Fibonacci at £0.8300 would be appealing. Playing a triple top reversal on yield appetite on euro-Aussie would be confirmed below Au$1.4825. Kiwi-yen is another yield play should it break its wedge resistance at ¥84.