Analyst picks

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Long dollar-yen, short Aussie dollar-dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

Price action last week boosted the prospect of a US dollar turnaround, but sterling-dollar looks like it will stay on the sidelines for now. Instead, my focus is on the Aussie dollar-dollar and dollar-yen, where both pairs are on the verge of breaking significant levels. A continued turnaround in US data is critical, now that the April US labour market report has nullified spring slowdown fears. A move below $1.0210 in Aussie-dollar should attract sellers for a move towards $1.0100/15.

STRATEGIST
ILYA SPIVAK

My pick: Stay long euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I bought euro-dollar at $1.2934 on 5 April, as prices broke trend line resistance defining the down move from the 1 February swing. I looked at this as a trigger to trade ebbing debt crisis worries and a shift in focus back to European Central Bank (ECB) versus Fed balance sheet dynamics. This is supportive for the pair as the Fed continues to ease while the ECB’s latest rate cut is essentially moot as market rates remain substantially below the benchmark. I continue to hold long, targeting a break above $1.3242.

CHIEF STRATEGIST
JOHN KICKLIGHTER

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

Volatility is heating up, but the markets refuse to march to the same drum. There is little consistency in theme or momentum to trade a trend. I’m still looking for trades that have high impact potential, even if there is lower probability that they trigger. Risk aversion has the most potential, and there I still like euro-yen below ¥126.50. Heavy order nesting above ¥100 for dollar-yen can offer a short-term follow through drive. And euro-sterling below its £0.8400 wedge floor has no little “risk” exposure.