My pick: Looking to buy euro-Swiss franc
Expertise: Combining technical and fundamental analysis
Average time frame of trades: 1 month to 3 months
It is hard to ignore the very well publicised SNB SFr1.2000 floor and ability for the market to remain so well supported by the barrier. Still, the market is technically in the process of carving a major bottom on the longer-term chart, and we continue to project additional upside from here. Favorable yield differentials also don’t hurt and we look for a break back above SFr1.2050 to confirm and likely accelerate gains further up. Ultimately, only a daily close below SFr1.1900 negates.
My pick: Short gold
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
A recession in the Eurozone and slowdown in China are bearing down on global growth while the Fed is turning less dovish. Meanwhile, fears of a credit crisis triggered by a Eurozone default have been downgraded after ECB LTRO efforts buffered the banks with close to €1 trillion in capital. This stands to sap store-of-value demand for gold. I will enter short on a weekly close below rising trend line support set from October 2008, loosely defined at $1,630.
My pick: Short euro-dollar, long euro-Swiss franc
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
The sharp risk aversion move of this past week was quickly muddled before a bear trend set up shop. As such, taking early profit on the short sterling-yen and managing Brent short exposure from $121.25 is necessary. Moving away from the volatile flippancy of risk trends, I am watching for a meaningful congestion break from euro-dollar below $1.3000. In the meantime, I’m awaiting the SNB’s move with euro-Swiss franc stalled at SFr1.20000.
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