Analyst picks for 30 July 2012

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Short Australian dollar-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

Our previous Aussie dollar-dollar short from $1.0425 hit its initial profit target at $1.0270. The pair hit trendline support at $1.0190, in turn giving way to the rally up to $1.0500. Shorts are advisable at current levels (above $1.0490) as Aussie dollar-dollar is hitting channel resistance and the four-hour relative strength index is reaching overbought levels. With the Fed expected to disappoint this week, the US dollar looks primed to rally into the first week of August.

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 from the 1 June low, set in the aftermath of the latest EU leaders’ summit. Prices rebounded and are now testing key resistance at $1.2335, marked by former support at the May bottom. I am expecting the outcome of this week’s Federal Open Markets Committee meeting to disappoint hopes for added stimulus and drive the dollar higher on haven demand. I will therefore remain short.

CHIEF STRATEGIST
JOHN KICKLIGHTER

My pick: Short euro-dollar and Aussie dollar-Kiwi dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

Both my risk-off setups from last week mustered very small gains. This week, stimulus expectations will run rampant, curbing solid trends. Expectations will be high for the European Central Bank and Fed, which will stir euro-dollar. But a lack of real progress would make a $1.2165 drop attractive. For a non-risk setup, I like Aussie dollar-Kiwi dollar breaking trend at $1.2920. And, as usual, I await a slow or manufactured euro-Swiss franc rebound.