Analyst picks for 24 July 2012

CURRENCY STRATEGIST
CHRIS VECCHIO

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

Our initial Aussie dollar-dollar short from $1.0265 was stopped out at break-even, but a new position was initiated on Thursday at $1.0425, seeking levels below $1.0200. The euro-yen short from ¥98.55 hit its final target at ¥95.60, to net 295 pips in just over a week. Now we are looking for additional US dollar strength – Chinese and Spanish concerns are very much back in the picture, and the focus is shifting away from the US.

STRATEGIST
ILYA SPIVAK

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

I re-entered short euro-dollar at $1.2595, as prices corrected higher to retest the 1 June low, set in the aftermath of the latest EU leaders’ summit. Prices are now testing below my third revised objective at $1.2146. I will continue to hold short, with a daily close below this boundary prompting a revision of the soft target to the $1.20 figure. My stop-loss has been trailed to break even, and is set to be activated on a daily close above $1.2595.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

A rebound in risk trends this past week has balanced markets and offers a reasonable jumping point for both bullish and bearish trends. I’m looking for a fundamental underpinning and technical trigger for a risk position, and sterling-yen is positioned well with support at ¥122. Euro-dollar is particularly attractive, given renewed Spanish pressure and that it’s below the pair’s historical midpoint at $1.2135. Euro selling may also force the Swiss National Bank’s hand to act or surrender on its euro-Swissie floor.