My pick: Long dollar-yen at ¥79.80
Expertise: Technical analysis
Average time frame of trades: 6 months
Our recommendation for last week was triggered, and we are now long on dollar-yen after the market broke convincingly back above ¥79.80. We continue to contend that this market is in the process of carving a longer-term base. We are now looking for the formation of a fresh medium-term higher low by ¥77.65 – ahead of the next major upside extension towards, and eventually above, the 2012 highs of ¥84.20. Ultimately, only a move back under ¥77.65 would negate this stance.
My pick: Long dollar-yen, short Aussie-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I entered long dollar-yen at ¥78.96 and short Aussie-Canadian dollar at $1.0335 last week. I expect the greenback to strengthen against the yen, after the Fed opted not to launch QE3 last week, helping to support US yields relative to Japanese counterparts. The latter trade is meant to take advantage of an expected slowdown in Asian economic growth. Dollar-yen hit its initial target at ¥79.69 and I am not aiming for ¥80.94. The first target for my Aussie-Canadian dollar position is $1.0207.
My pick: Short Kiwi-Loonie, long euro-Swissie, long Loonie-Swissie
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
The impressive rebound in risk trends and carry currencies, through the first two weeks of the month, was significantly supported by the hope that the Fed or European authorities would give significant aid to the markets. That wasn’t the case however. As such, I’m looking at risk aversion opportunities and a Kiwie-Loonie reversal is an abnormal one. In the meantime, my euro-Swissie long and Loonie-Swissie long have no substantive correlation to sentiment.