My pick: Short dollar-yen against ¥103
Expertise: System trading
Average time frame of trades: Two to ten weeks
The US dollar rally looks a bit long in the tooth, as futures positioning data shows large speculators at their most long on the dollar against the single currency since the major July low in the euro/dollar exchange rate. I think the euro is due for a bounce, but my broader bearish bias prevents me from taking a euro long. Instead, I’ll look to the US dollar versus the yen, which looks at risk as US Treasury yields fall sharply. I like holding a short position as long as price remains below ¥103.00, which should likewise coincide with the 10-year below 2.65 per cent.