Analyst picks for 6 June 2012


My pick: Sell euro-dollar against 1 June high
Expertise: System trading
Average time frame of trades: 2 to 10 weeks

My euro-dollar short trade in May worked better than any trade in recent memory. The pair set its high at the very beginning of the month and did nothing but decline. I’m a big believer that a price trend can continue far longer than most expect, and I’m willing to take the same trade on the euro as the trend is overwhelmingly bearish. I’ll sell once more against the 1 June high, as I target a return towards multi-year lows near $1.19. If I get stopped out I will likely look to re-sell at a higher price.


My pick: Long Aussie-yen and dollar-yen. Short Aussie-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 week to 6 months

Between the Fed and the Bank of Japan (BoJ) it appears another round of stimulus is about to be unveiled. While these could lead to a massive rally against the yen and the dollar, I continue to look to short bounces in risk-appetite given the fundamental backdrop in Europe. The yen may have topped, after BoJ officials seemingly intervened after the non-farms release. This should lead to yen weakness over the coming days amid fears of intervention.


My pick: Short sterling-dollar. Long euro-Swiss franc
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

Risk aversion struggled to regain traction last week, but Euro-region fears kept my euro-dollar short on pace. I decided to take profit at $1.2415 as there is long-term support not too far below. I will look for a possible upgrade to the risk aversion move with a sterling-dollar close move below $1.5250 should risk trends support it. Meanwhile, Canadian dollar-Swiss franc is disengaged from risk trends and produced a wedge break, while euro-Swiss franc is awaiting the central bank.