Analyst picks for 17 January 2012


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

The Eurozone’s financial troubles have deepened heading into the new year, and we will feel the repercussions. However, euro-dollar is already exceptionally downtrodden. The spillover hasn’t fully happened for the sterling though and 17-month support around $1.5300 for sterling-dollar makes for a good technical and fundamental mix. Alternatively, euro-Swiss franc has the pressure of risk aversion but the dedication of an SNB fight at SFr1.20000.


My pick: Add to euro-dollar short position
Expertise: Global macro
Average time frame of trades: 1 week – 6 months

I entered short at $1.3526 on 9 November expecting the Eurozone debt crisis to continue to spread and moved my stop-loss to $1.3231 after the pair met my second objective at $1.2872, aiming for the next target at $1.2586. Euro net-short positioning is a bit stretched and prices are now showing a bullish engulfing candlestick pattern, hinting an upswing is ahead. I will look to a move higher as an opportunity to add to the position in the days ahead.


My pick: Looking to buy euro-Japanese yen
Expertise: Technical analysis
Average time frame of trades: 2 weeks

Although the market has been under some intense pressure in recent weeks to drop to fresh multi-year lows below ¥100.00, we see the price action as a little stretched and exhausted and anticipate a more significant corrective rally at a minimum before consideration of underlying bear trend resumption. The break back above ¥98.50 reaffirms our bias and should now open an acceleration towards the ¥105.00 area.