Analyst picks

DailyFX

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Buying dips in dollar – Aussie dollar and yen prime targets
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

The euro-yen and dollar-yen short ideas last week proved to be a near-term play, with both pairs ranging lower only to break out to fresh post-Fed highs by Friday. Accordingly, dollar-yen consolidation proved to be a symmetrical triangle, with bullish implications towards ¥100.55, ¥101.30, and ¥101.88. Elsewhere, Aussie-dollar rallies have been shallow (falling short of 23.6 per cent Fibonacci retracements). The Reserve Bank of Australia should this week cast an increasingly dovish backdrop, given credit crunch concerns in China.

QUANTITATIVE STRATEGIST
DAVID RODRIGUEZ

My pick: Looking for pullbacks to get long dollar
Expertise: System trading
Average time frame of trades: 2 to 10 weeks

It’s shaping up to be another critical week for forex price action, and I believe buying US dollar dips remains attractive. In short: the burst of the biggest bond bubble of a generation threatens to force volatility higher across the board. The dollar will likely be the biggest beneficiary of any such moves in the FX space. For euro, I’m looking towards $1.3150-1.3250 to get short, dollar-yen I’ll look to buy near ¥97 to ¥97.50, and the sterling looks like an attractive sell starting at $1.5350.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

The risk aversion wave following the Fed taper warning lost much of its momentum last week. However, sentiment is still exposed to a deleveraging event. With a exceptionally high potential, even if a lower probability outcome, I am watching euro-yen for a short below ¥126. A break below ¥128.50 doesn’t require full “risk off”. For the alternative, I like playing a trendline break for the over-extended euro-Aussie dollar at Au$1.3950. Getting away from risk, a $0.8460 range break pits the Eurozone versus the EU.