Analyst picks for 10 April 2012


My pick: Looking to Buy euro-Swiss franc
Expertise: Fundamental and Technical Analysis
Average time frame of trades: 1 month to 3 months

We don’t usually incorporate fundamentals into our trade ideas, but it’s hard to ignore the Swiss National Bank SFr1.2000 floor. Still, the market is technically in the process of carving a major bottom on the longer-term chart, and we continue to project additional upside from here. Favourable yield differentials also don’t hurt. Look for a test of SFr1.2000 or a break back above SFr1.2100 to confirm and likely accelerate gains towards SFr1.2500 further up. A close below SFr1.1900 negates.


My pick: Short gold (pending)
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months

With global growth slowing courtesy of a recession in Europe and the Fed backing off its ultra-dovish posture, inflation is likely to be contained. Meanwhile, fears of a credit crisis triggered by a Eurozone default have been downgraded after the ECB’s LTRO efforts buffered the banks with close to €1 trillion in capital. This stands to sap store-of-value demand for gold. I will enter short on a weekly close below rising trend line support set from October 2008, now at $1,630.


My pick: Short sterling-yen; long euro-Swissie
Expertise: Fundamental and Technical Analysis
Average time frame of trades: 1 day to 1 week

The opportunities out there for a sustained risk aversion drive are plentiful. I see euro-dollar, euro-yen and Australian dollar-yen as some of the most primed – but they require active management. More reserved and consistent for developing trend would be a UK Oil (Brent) break from congestion below $121.25 and sterling-yen clearing ¥130. In the meantime, I’m sticking with the SNB’s vow to hold its floor on euro-Swiss franc (from SFr1.2060).