Analyst picks for 4 December 2012


My pick: Long dollar-yen and gold
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days

I remain long on dollar-yen from ¥80.65, looking for a move towards ¥83.75 before I take profit. To hedge this position, I opened a long position on gold at $1,705 per troy ounce. As we move into December, I am more bullish about risk-correlated assets. This is due to the fact that, since 1950, the S&P 500 has averaged a gain of 1.72 per cent in December – its best month of the year. Progress on the fiscal cliff will help this outlook.


My pick: Stay short Aussie-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I went short on the Aussie-dollar on 15 November at $1.0381, as I saw a bearish trend shift in the S&P 500, which is likely to sink the Aussie. My price target is $1.0181. Though risk appetite has recovered, the Aussie has been slow to capitalise on it, amid expectations that the Reserve Bank of Australia will cut rates. In this environment, a return to risk aversion is expected to be more punishing, and I will continue to hold my short position. A stop will be triggered on a daily close above $1.0479.


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

My picks from last week had mixed success. Risk trends turned into congestion, and my Kiwi-dollar short at $0.8175 remained flat. I’ll stick with it for now, and place a stop above $0.8300. Due to risk leveling off, I took profit on my long Candadian dollar-yen position at ¥81.50, which was earlier than I had planned. Away from risk trends, I’m taking a conservative long position on dollar-yen from ¥81.50. I will also look for a move below the pivot point on Aussie dollar-Kiwi at NZ$1.27.