My pick: Tentative long euro-dollar, looking to buy dollar-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks
Dollar-yen’s evening star candle cluster has yielded a move towards last week’s opening gap at ¥97.50, although a retest of the mid-March resistance-turned-support at ¥96.60 would be ideal to re-enter longs for a move to ¥100.00. The collapse in gold late last week suggests that US Treasury yields should rise, which would be supportive of a stronger dollar. Currently, I’m long euro-dollar from $1.3080 looking for $1.3265, but keeping risk tight to a daily close at or below $1.3040.
My pick: Long euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I entered long euro-dollar at $1.2934, as prices broke above falling trend line resistance. The set-up hinted that ebbing Cyprus contagion risk is allowing the European Central Bank/Fed balance sheet dynamics to return into focus, which is supportive for the pair as the Federal Open Market Committee continues to ease, while Mario Draghi and company slowly tighten via Long-Term Refinancing Operation repayments. A breach above my initial target at $1.3139 will expose the next objective at $1.3383.
My pick: Short euro-yen, dollar-yen, and long sterling-dollar
Expertise: Fundmental and technical analysis
Average time frame of trades: 1 day to 1 week
A swell of volatility through the end of this past week caused commotion for gold and the yen crosses. However, the bump in activity didn’t translate into a firm risk-based move. Yet that may still come. To be prepared, I like euro-yen below ¥127.50 for a troubled euro and carry exposure. Alternatively, should risk hold steady, my bullish sterling-dollar break can keep moving. Further, the least carry-sensitive yen cross – dollar-yen – has natural momentum should it break ¥100.