DailyFX Tips & Picks: Analyst’s pick

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Out of euro long, looking short post-FOMC meeting
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

A more hawkish Federal Open Market Committee (thanks to Fed chair Janet Yellen’s hint that the first rate hike could come around six months after the third quarter ends) has helped further recalibrate the needle for the euro-dollar. Eurozone economic data has started to disappoint generally. If the market’s fear of the ECB grows amid the recent flip in central bank narrative, with speculators now the most bullish on the euro since October (Commodities Futures Trading Commission data shows Euro longs increased by 45.6 per cent for the week ended 18 March 2014), the perfect mini-storm for euro weakness in the coming weeks may be developing.