My pick: Short yen
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks
Our automated trading strategies have had a positive week through selling the Japanese yen against the US dollar, euro, and other currency pairs. Past performance is not indicative of the future, but the yen has always been about relative yields, and the Bank of Japan’s aggressive policies have sent Japanese government bond yields plummeting. I like selling into any yen bounces against both the dollar and euro, from ¥97.20 against the greenback and ¥126 versus the euro.
My pick: Long euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I entered into a long euro-dollar position at $1.2934 last week, as prices rose above the falling trend line resistance after the European Central Bank’s (ECB) latest policy announcement. Recent events have allowed traders to once again focus on the relationship between the ECB and Fed balance sheets, which may continue to support the currency pair as the Fed continues its programme of easing. My initial price target is $1.3139, and a stop loss will be triggered on a close below $1.2745.
My pick: Short euro-yen, long New Zealand dollar-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
The Bank of Japan’s policy announcement proved to be every bit the market mover that traders expected. However, I have my doubts. The market has already priced in a lot of the move, and the yen’s exposure to the carry trade makes it sensitive to bouts of risk aversion. For a continuation move, I like a long New Zealand dollar-yen trade if the pair remains above ¥80. But if it is dragged lower, a euro-yen short from ¥125 may be appropriate to take advantage of euro weakness.