Analyst picks for 24 April 2012


My pick: Sell sterling-dollar at $1.6210
Expertise: Technical analysis
Average time frame of trades: 3 days to 1 week

The market has recently broken to fresh 2012 highs beyond $1.6000. This now likely opens additional upside, back towards the October 2011 peak by $1.6165 further up. While our core bias remains bearish, we will stand aside and look for opportunities to sell into rallies above $1.6200, in anticipation of an eventual bearish resumption. A break and close back below $1.6000 is now required to alleviate immediate topside pressures. Sell $1.6210 for a $1.5800 objective. Stop at $1.6410.


My pick: Short gold (pending)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

Recession in the Eurozone and slowdown in China bear down on global growth, while the Fed is turning less dovish. Inflation will likely be contained as QE3 prospects fade. 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 sell on a weekly close of $1,622.25, which would clear support at the September 2011 bottom and a trend line from late 2008.


My pick: Aussie-dollar breakout, long euro-Swissie/sterling-Aussie
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

The Brent oil short last week worked well. However, the euro-dollar short below $1.3000 never materialised and euro-Swissie is still anchored to SFr1.2000. I will stick with the latter, as the Swiss National Bank is being backed into a corner, with few options apart from manipulation. Elsewhere, a wedge on Aussie-dollar will soon break, and follow-through would be good either way. A sterling-Aussie short scenario plays to alternative expectations on GDP and CPI.