Analyst picks for 18 June 2012


My pick: Buy dollar-Japanese yen
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week

We continue to see this market very well supported into additional setbacks, with the greater risk of the formation of a major longer-term base, after setting record lows in 2011. As such, any resumption of gains will be viewed as constructive, with a break back over the recent consolidation highs (just under ¥79.80), to likely confirm a fresh medium-term higher low – ahead of the next major upside extension back above the current yearly highs at ¥84.20.


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

I sold euro-dollar on 8 May at $1.3004, as prices broke technical support at $1.3025. Prices are on the upswing after Greece’s pro-bailout parties secured enough seats for a ruling coalition, but this does nothing to dismiss instability elsewhere – such as Spain – nor the likelihood that a recession will push the ECB towards easing monetary policy. With that in mind, I will continue to hold short, expecting the current bounce to be corrective in the context of a larger decline in the coming days and weeks.


My pick: Long euro-Swissie and Canadian dollar-Swissie
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

This week is packed with event risk and potential stimulus from different corners of the market. That translates into a high level of volatility and trouble in establishing clear direction. Though there are good plays on crisis relief in stimulus potential – like a general short-dollar approach – I’ll avoid risk trends. My long euro-Swiss franc still has the backing of the SNB at SFr1.2000, and I’m riding Canadian dollar-Swiss franc on a trailed stop after hitting my first target.