Analyst picks for 26 February 2013



My pick: Short Aussie-dollar and sterling-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days

Even as the US budget sequester looms, I remain a dollar bull. If the sequester happens, global risk-aversion is likely, which will support the dollar. With Luigi Bersani favourite to win the Italian elections, a long euro-dollar trade may help to mitigate risk – as it did last December, ahead of the first fiscal cliff. Given the UK’s recent credit downgrade, and intransigence by the Bank of England and the Treasury, I am looking to sell into sterling-dollar rallies.


My pick: Short euro-Swedish krona and sterling-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I went short on euro-krona at Kr8.7315, as I expect the Swedish Risksbank to keep rates on hold, and the European Central Bank to lean towards easing. I added to the position at Kr8.6409 in January. My initial target price of Kr8.4994 has been met, and I am now aiming for Kr8.4150. I also went short on sterling-dollar at $1.5662, as the currency pair began its downtrend. My initial target of $1.5440 has been met, and if the pair breaks below $1.5132, my next price target is $1.50.


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

My short positions on euro-dollar and euro-Aussie dollar were triggered last week, and both trades still have the potential to run further. But this week I’m moving on to other trades. At the top of my list is the possibility of a broader reversal in yen currency pairs. I will look for short positions in both dollar-yen below ¥92, and euro-yen below ¥122. And if risk sentiments turn, a short position on New Zealand dollar-dollar below $0.8275 also looks attractive.