Analyst picks for 26 March 2012


My pick: Looking to buy euro-Swiss franc
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 month to 3 months

We don’t usually incorporate fundamentals into our trade ideas, but it’s hard to ignore the Swiss National Bank’s SFr1.2000 floor. Still, the market is technically in the process of carving a major bottom on the longer-term chart, and we continue to project additional upside from here. Favourable yield differentials also don’t hurt and we will look for a break back above SFr1.2100 to confirm and accelerate gains towards SFr1.2500 further up. Below SFr1.2000 negates.


My pick: Short gold (pending) on a weekly close below $1,622.25
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months

The world economy is slowing due to the Eurozone, the Fed is backing off its ultra-dovish posture amid stronger US economic data, and inflation is likely to be contained as the prospects of QE3 fade. Also, EU sovereign risk downgrade fears have been downgraded after the ECB’s second LTRO operation. This is likely to sap store-of-value demand for gold, opening the door for a reversal as prices test rising trend line support set from October 2008.


My pick: US from $110-$105; long euro-Swiss franc from SFr1.2060
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day to 1 week

A correction on the yen crosses was long overdue given the incredible rally these past few months, so my dollar-yen hit its trailed stop at ¥82.75 for a good return. I’m still very much a long-term dollar-yen bull and will be looking for re-entry when the reversal fades. In the meantime, the congestion on US oil is very interesting. A $110 to $105 range offers clear entry points on a confirmed break (higher time frame close) outside the bounds.