Analyst picks for 19 February 2013


My pick: Short Aussie-dollar and sterling-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days

As European currencies have come under intense pressure recently, and the yen resumed its slide after a tepid response from the G20 nations last weekend, the dollar continues to shine. Both the Bank of England and Reserve Bank of Australia release minutes from their latest policy meetings this week. And given that both central banks are maintaining a dovish outlook, I still favour being short on Aussie-dollar and sterling-dollar.


My pick: Short euro-Swedish krona and sterling-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I expect the Swedish Riksbank to keep rates on hold in 2013, and the European Central Bank to begin easing as recession lingers. Therefore, I went short on euro-krona in December. I added to this position in January. My initial target price of Kr8.4994 has been met, and I am now aiming for a price of Kr8.4150. I also went short on sterling-dollar at $1.5662, as the currency pair began its downtrend. The pair continues to slide, and I am initially targeting a price of $1.5440.


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

As traders digest a deepening recession in the Eurozone, the European Central Bank needs to respond to help engineer growth, or risk a return to the crisis days. Therefore, I’ll be keeping an eye on euro-dollar for breaks below $1.3250, and for the euro-Aussie to fall below Au$1.30. Dollar-yen is also in overbought territory now, so I will be watching for breaches of the current support level, around the ¥92 mark, to go short on the currency pair.