Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

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

Overbought dollar conditions have provoked short-term countertrend moves in Aussie-dollar, euro-dollar, sterling-dollar, and dollar-yen. But now that the Cypriot bailout has come to the surface, the dollar may find appeal once more. Because the Cypriot bailout raises the unprecedented measure of taxing depositors, concerns over the safety of capital in peripheral countries are likely to increase. I prefer playing the euro short against sterling and the dollar during the second quarter of 2013.

STRATEGIST
ILYA SPIVAK

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

I sold euro-Swedish krona at Kr8.7315, expecting the Swedish Risksbank to shift to a neutral policy stance in 2013. I added to the position at Kr8.6409 as a rebound, launched in January, faltered. Prices have turned higher again and I will use this move to grow the trade. I also sold sterling-dollar at $1.5662, as prices broke multi-year trend line support set from early 2009. Here too prices staged a recovery, which I’ll treat as an opportunity to scale in, looking for $1.53 to hold as resistance.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

Questions still surrounding the Eurozone’s financial stability are curbing my enthusiasm for a straightforward euro-dollar or euro-sterling trade. There is also a question mark hanging over yen and risk trends, but the opportunity is stark for both. For a risk aversion view, I like a dollar-yen short below ¥95 – and a generous stop. Kiwi dollar-yen is the alternative should it break above ¥80 resistance. Sterling-Kiwi is more tech driven, with an inverse-head-and-shoulders neckline at NZ$1.84.