Analyst picks for 15 October 2012


My pick: Long New Zealand dollar-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days

Last week I explained that I took a new long New Zealand dollar-dollar position at $0.8175. Alongside new stimulus measures expected from China, as the new leadership comes into play, and a positive market reaction from a Spanish bailout request, I’m gearing up for a dollar sell-off in October. Little has changed over the past week and the trade has weathered some selling in US equity markets. I continue to maintain my bias.


My pick: Stay short Aussie dollar-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I sold Aussie dollar-Canadian dollar at Ca$1.0441 on 14 August to trade expectations of a pick up in US economic growth, coupled with a slowdown in China. I added to the position at Ca$1.0370 on 24 August, as the down move resumed after a brief rebound. Last week the pair put in a shooting star candle on a retest of support-turned-resistance at Ca$1.0048. I added to the position once again. My stop-loss will now be triggered on a daily close above Ca$1.0089. My first objective is Ca$0.9955.


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

I’ve held off from congestion setups because the pressure is building behind far bigger risk moves ahead. I am looking for an S&P 500 break below 1,425, which would be excellent confirmation for a $1.2825 euro-dollar break. The $1.0150 floor is a good Aussie dollar-dollar turning point. But a rebound before a turn lower is possible, so I’m looking at $1.0500. Dollar-yen is my non-risk pair, with a view for a channel break above ¥79.00.