Analyst picks for 10 January 2012


My pick: Sell euro rallies into $1.3000
Expertise: System trading
Average time frame of trades: 2 to 10 weeks

Market sentiment is incredibly one-sided, as non-commercial futures traders are their most net-short euro-dollar on record. Yet the trend is down until it isn’t, and I like selling euro strength as long as we don’t see a daily close above $1.3000. Plausible short entry levels include $1.2800 and beyond that $1.2950. I will bail on any short positions on a daily close above $1.3000 and target key 2010 lows of $1.2590.


My pick: Looking to buy euro-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week

This market is trading near 20 year lows and finally broke to fresh record lows below $1.2500. Short, medium and long-term studies are all looking stretched and I will look for an opportunity to buy in anticipation of a major correction and eventual bullish trend reversal. Only a weekly close below $1.2300 would ultimately give reason for concern, while back above $1.3000 confirms and should accelerate gains. Buy entry has been placed on a daily close back above $1.2650, with stops on a weekly close below $1.2300.


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

I entered short at $1.3526 on 9 November expecting the Eurozone debt crisis to continue to spread and moved my stop to $1.3231 last week after the pair met my secondary objective at $1.2872, aiming for the next target at $1.2586. Positioning now appears oversold and a corrective bounce is likely, particularly considering the likely onslaught of jawboning from officials heading into the 30 January EU summit. I will treat any recovery as an opportunity to add to the short position.