My pick: Stay long sterling-dollar
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks
I’ve remained long on sterling for some time now, and I continue to like the trade on a broad unwind of sterling short positioning, as seen through futures and options markets. The pound has obviously clawed back much of its year-to-date declines, but it’s worth noting that the dollar side of this trade has become extremely crowded. I like sterling-dollar above $1.51 as I think the US dollar could give back much of its gains as traders unwind positions.
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. Prices are turning lower again after another corrective upswing and I continue to hold short. A stop-loss is set to trigger on a close above Kr8.4543. I also sold sterling-dollar as prices broke multi-year support set from early 2009. Here a rebound seems to be running out of steam and I’ve added to the trade at $1.5155.
My pick: Short dollar-yen, long Kiwi-yen and sterling-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
We have event risk ahead that can both spur volatility and develop long-dormant trends. At the top of the list is the Bank of Japan’s rate decision. The dollar-yen short from ¥95 has to be exited to avoid a possible stimulus surprise. If the Bank of Japan doesn’t live up to expectations, dollar-yen below ¥93.25 is one of many options. If they beat, I like Kiwi dollar-yen above ¥80. Another stimulus track, sterling-dollar has resistance at $1.5250 ahead of the Bank of England.