Analyst picks for 6 August 2012


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

A new short Aussie dollar-dollar position was established at $1.0565, after European Central Bank disappointment. The results of last week’s Fed meeting and the July non-farm payrolls report leave the US dollar fundamentally constructive in the near term. The commodity currencies (Aussie dollar, Canadian dollar and New Zealand dollar) appear to be carving out tops. We suspect the perceived progress from Friday could lead to a rally by the European currencies.


My pick: Long euro-dollar above $1.2250
Expertise: System trading
Average time frame of trades: 2 days to 10 weeks

I’ve remained bullish on euro-dollar for the last two weeks. We saw a substantial shift in our retail FX trader-based speculative sentiment index, strongly hinting at a bottom. I like buying euro-dollar above $1.2250, a key congestion support, against multi-week lows of $1.2130. Targets start at $1.26, and I think multi-month highs of $1.2730 are within the realm of possibilities, as retail crowds sell aggressively into euro strength.


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

Expectations of more Fed and European Central Bank stimulus prevented a strong follow through for euro-dollar last week. A clear trend remains elusive for that pair. Therefore, fundamentally disconnected pairs or stable ranges look better. I’m holding my Aussie dollar-Kiwi dollar short, from NZ$1.2980, and sterling-dollar has a strong range as long as risk doesn’t explode or implode. I continue to await the Swiss National Bank’s move on euro-Swiss franc.