Analyst picks for 13 November 2012

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Long Aussie dollar-yen, euro-dollar and gold
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days

New trades were initiated on Friday, with the intention of looking for 1 to 2 per cent bounces from each. Although the risk environment has been increasingly negative over the past few weeks, we’re approaching major levels in a number of key securities that will likely produce rebounds across asset classes. With Chinese data improving and the US fiscal cliff garnering attention, I like being long on gold, as well as holding small long positions on Aussie dollar-yen and euro-dollar.

QUANTITATIVE STRATEGIST
DAVID RODRIGUEZ

My pick: Short Aussie-dollar against monthly high
Expertise: Systems trading
Average time frame of trades: 2 to 10 weeks

I want to long the US dollar against its major counterparts. Trading crowds recently turned short on the US dollar against the euro for the first time since September. I like selling euro-dollar as well, but the best reward for the risk may actually come from the Aussie dollar-dollar. I’ll take a short entry with a stop above month-to-date highs of $1.0480. First targets are the $1.0300 mark, but I’ll likely trail my stop instead of taking full profits on said position.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

Risk aversion is finding a better foothold in the currency and capital markets. Long-term trends, however, may be problematic due to fundamental conflicts. With a strong risk aversion follow through, I expect the dollar to play catch up with an Aussie dollar-dollar break below $1.0350 (which necessitates a 100 pip stop). A long sterling-yen from channel floor and 100 day simple moving average at 125 is an alternative view. Sterling-yen is non-risk and the 79 pivot is a good interim floor.