Analyst picks

QUANTITATIVE STRATEGIST
DAVID RODRIGUEZ

My pick: Long Aussie dollar-dollar against the low
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks

Financial market risk sentiment has proven impressively resilient, and the Aussie dollar-dollar has filled the gap lower created at Sunday’s market open. Last week I spoke in favour of an Aussie dollar-dollar long, and recent price action only confirms my bullish bias. I want to go long on Aussie dollar-dollar against Sunday’s low at $1.0340, with a near-term target of $1.0480. A minimum reward/risk ratio of 1:1 implies entry remains valid at $1.0410 or below.

STRATEGIST
ILYA SPIVAK

My pick: Stay short euro-Swedish krona and sterling-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I sold euro-Swedish krona at Kr8.7315, expecting the Swedish Risksbank to shift to a neutral policy stance in 2013. I added to the position at Kr8.6409 as a corrective rebound faltered. Prices are bouncing again and I will use this move to add to the short further. I also sold sterling-dollar at $1.5662, as prices broke multi-year trend line support set from early 2009. Here too, prices have begun a tentative correction higher, which I am treating as an opportunity to scale in as upward ebbs.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

Volatility has picked up for the FX market, but without guidance from a dominant fundamental theme (like market-wide risk aversion), trend development is short circuited. That has curbed the drive behind my sterling-dollar long and Kiwi-dollar long from last week. I still see the potential of a big dollar unwind outside of risk, and that is a good set-up for dollar-yen dropping below ¥95 and euro-dollar breaking above $1.3100. A sterling-Kiwi dollar long above NZ$1.8400 plays to an oversold pound.