Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

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

Now that the threat of a Fed taper is “out there”, investors have been paring back risk, exposing assets previously successful thanks only to excess liquidity, proving to be a positive for the yen (despite onset weakness). Thus, it is too early to declare the yen rally since late-May complete either. For dollar-yen, only a break of 99.25/35 – the June high – and the 50 per cent retracement of the May 22/June 7 high/low, will negate the bearish bias in the pair.

STRATEGIST
ILYA SPIVAK

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

The Aussie Dollar has taken a heavy beating over recent weeks. Record high speculative net short positions in the FX futures space hint the short side may be overcrowded however, and the two-year bond yield spread in favour of the Aussie following last week’s Federal Open Market Committee rate decision hints a catalyst for a correction driven by profit-taking may be emerging. I will look to the bounce as an opportunity to sell Aussie dollar-dollar at a more attractive level.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

The Fed shook overextended stimulus positions (Treasuries, certain dollar shorts) this past week with its talk of tapering. The fundamental distress was good for the euro-dollar short last week. However, we are not into true panicked, risk aversion territory yet. If fear takes over, I like Aussie dollar-yen below 88.75 – and if not, a steadying could break it north above 91.00. A dollar-yen short below 96.20 plays trend, yen and dollar. Non-risk, a euro-pound channel break below 0.8460 diversifies.