Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Closed long dollar-yen, and closed short Aussie-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

I closed out the two positions I was monitoring last week – long dollar-yen and short Aussie-dollar – for gains of 193 pips and 220 pips respectively, amid the groundswell in enthusiasm for the US dollar. With secondary data softening this past week and two major Fed events on Wednesday, there is scope for pause in the buck’s bull run. I’m neutral for now, but intend on buying dips in dollar-yen, and selling rallies in Aussie-dollar, euro-dollar, and sterling-dollar in the future.

STRATEGIST
ILYA SPIVAK

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

I sold sterling-dollar at $1.5533 on 3 May, as a bearish daily close confirmed the downside implications of a shooting star candlestick set at the top of a rising channel carved out since mid-March. The trade aims to capitalise on weakness linked to expanded Bank of England stimulus speculation ahead of Mark Carney’s entry as governor. Prices met my initial objective at $1.5385 and broke support in the $1.5195 to $1.5249 area. I will remain short and aim for $1.5029 from here.

CHIEF STRATEGIST
JOHN KICKLIGHTER

My pick: Long Aussie-Kiwi and dollar-Loonie, short euro-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

The contradictory themes of building risk and dollar strength held this past week. However, there is tremendous potential, specifically in a souring of risk trends. While there are plenty of trades in a “risk off” scenario, I prefer a euro-yen break below ¥131 to turn trend. In risk aversion, the dollar will likely gain further; so a dollar-Canadian dollar break above its long-term wedge top at Ca$1.0300 is attractive. Finally a Aussie-Kiwi trend reversal above NZ$1.2100 doesn’t depend on risk.