My pick: Short Aussie-dollar, sterling-dollar, looking to buy dollar-yen
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks
The euro-dollar long trade was short-lived, as the rally proved to be quick. The dollar is looking ready to break out, bolstered by a weak yen that has investors rebalancing their “safe haven” holdings. The dollar-yen traded into my ideal ¥96.60 level to get long again and, given the ascending channel that has enveloped the pair in 2013, resistance comes in at ¥100.25/50. Longs should then be reduced, as bearish relative strength index divergence persists and could provoke a technically-driven pullback.
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, defining the downward correction from the 1 February swing top in the aftermath of the European Central Bank policy announcement. I am looking for ebbing debt crisis risk to allow the European Central Bank/Federal Reserve balance sheet dynamics to return into focus. The pair is consolidating above the $1.30 figure, and I will continue to hold the trade, looking for a move above $1.3175 to expose $1.3287.
My pick: Short euro-dollar, long dollar-yen and sterling-Kiwi
Expertise: Fundmental and technical analysis
Average time frame of trades: 1 day to 1 week
A violent spasm of volatility shot through the markets this week, and we came dangerously close to catalysing a market-wide risk aversion move. Yet momentum didn’t catch. Risk aversion is still a tangible risk, and a euro-dollar head-and-shoulders reversal below $1.3000 is a prime opportunity. Also risk-sensitive sterling-Kiwi dollar could rally from record lows on a break above NZ$1.8275. Alternatively, dollar-yen breaking the round ¥100 level can generate a burst of bullish momentum.