Analyst picks for 11 September 2012


My pick: Short Aussie-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

Despite the rebound, Aussie-dollar has pulled back to respect a former channel, reversing some of its gains from the Chinese stimulus measures announced last week. Accordingly, topside resistance comes in at Au$1.0350-55 (20-day moving average), Au$1.0365-70 (channel resistance) and Au$1.0410-20 (mid-August swing lows). A breakdown eyes Au$1.0275-1.0300, Au$1.0210-25 and Au$1.0160-75 (weekly lows). If the Fed announces QE3 on Thursday, close the position.


My pick: Scale back Aussie-dollar short
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks

I will continue scaling in and out of Aussie-dollar short positions, as long as the price remains below the multi-week highs of Au$1.0550. However, the recent break above Au$1.0350 leaves me in a small residual position. I am not convinced that the sudden downturn is over, but I do not think that it would be wise to add to the position amid a major weekly reversal. The August high of Au$1.0610 is the line that I will draw in the sand.


My pick: Long euro-Canadian dollar, euro-Swissie, and dollar-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

There is tremendous potential to trade, but conditions still support breakout and short-term swing setups. With so much event risk and speculation on stimulus, I’m looking to pairs that can find short-term follow-through on good breaks. I like euro-Canadian dollar above Ca$1.2550 in a risk-off or euro rally scenario. Euro-Australian dollar breaking below Au$1.2225 is the opposite. Given the upcoming Fed decision, I like a dollar-yen break from ¥78-78.25. And, euro-Swissie is finally climbing.