Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

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

The US dollar has rebounded solidly after last Thursday’s carnage, retaking all its losses against the yen in two days. Now, pressure looks to the downside once more, as no new measures are likely from the Bank of Japan (and any measures to calm Japanese government bond volatility won’t be sufficient). Elsewhere, record COT positioning suggests Aussie-dollar might be carving out a near-term low at $0.9386. Accordingly, I prefer to be short on dollar this week against the opening week high/lows in the Aussie-dollar and dollar-yen.

STRATEGIST
ILYA SPIVAK

My pick: Short Aussie-dollar
Expertise: Global macro
Average time frame of trades: 1 month to 6 months

The Australian dollar has taken a heavy beating over recent weeks, with prices hitting a 20-month low against the greenback to start the week. While worrisome data from China – Australia’s top trading partner – argues for continued weakness on the back of Reserve Bank of Australia rate cuts bets, weakness seems a bit overdone and vulnerable to correction. I will look for confirmation of a bottom being carved out near the $0.94 figure and allow prices to retrace higher, loosely aiming to get short around the $0.98 mark.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

We have seen a serious shudder in risk-based trends, but volatility has yet to translate into conviction (trend). A long-term, market-wide trend prospect needs to catch traction to offer a viable trade. In a risk aversion scenario, my euro-yen short from ¥130 has plenty of unwind. Alternatively, a risk recovery could play to a pricey dollar and oversold Australian dollar for a Aussie-dollar break above $0.9800. Finally, Australian dollar-Canadian dollar breaking back above C$0.9750 is a good, oversold, and less-risk-sensitive trade.