DailyFX Tips & Picks: Analyst’s pick


My pick: Stay short sterling-yen; euro-dollar and dollar-yen key levels ahead
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

Sterling-yen is on track for a meaningful pullback in light of two significant fundamental factors: a shift in Bank of England and Bank of Japan policy signalling; and global risk aversion rising due to emerging market turmoil. A bearish bias remains appropriate as long as price remains below last week’s high of ¥173.60-65. Elsewhere, euro-dollar looks primed to move higher as long as it holds $1.3650 this week, while a more concerted dollar-yen pullback, and a more significant top, would be established below ¥101.50. Look to the Federal Open Market Committee meeting tomorrow to further establish the legitimacy of these key levels.