DailyFX Tips & Picks: Analyst’s pick

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Waiting for euro-dollar, euro-yen range breaks
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: A few days to a few weeks

Despite a cascade of geopolitical headlines over the weekend – civil war sweeping across Iraq and Russian company Gazprom shutting off gas supplies to Ukraine – FX markets are rather tepid. In the case of both the euro-yen and euro-dollar, it’s difficult to envision a scenario in which the significant levels of support (euro-yen: ¥137.85; euro-dollar: $1.3502) give way with relative ease. That being said, yesterday’s readings of the FXCM Speculative Sentiment Index (SSI) for euro-yen and euro-dollar both show net-long positions among retail traders. As a contrarian signal, this implies a bias for euro prices to head lower.