Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Short sterling-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

The dollar is taking on a hybrid role as both a safe haven and a growth currency, as US Treasury yields rise. With another batch of strong US data due out, alongside neutral UK data, there is potential to see sterling-dollar slowly grind back towards its May lows, set just above the psychologically significant $1.5000 level. A technical break in line with my view may already be beginning, denoted by a bearish rising wedge. There is a favourable short sterling-dollar setup that may evolve over the next five to ten days.

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 offered confirmation to 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 second objective at $1.5195 and I’m now looking for a break below $1.5029. A stop-loss is set to activate on a daily close above $1.5322.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

A long holiday weekend can sabotage momentum in the fledgling risk aversion shift we’ve seen develop this past week. But I will hold onto my euro-yen short from the ¥131 congestion support break. If fear takes and ¥130 gives, this will be a strong trade. Meanwhile, dollar-Canadian dollar – a pair is less beholden to risk – cleared a multi-year wedge top at Ca$1.0300. Finally, I’m monitoring Aussie-Kiwi for a reversal above NZ$1.2000 despite multi-year lows on the assumption of an oversold Aussie.