Analyst picks


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

I took last week’s trades – long dollar-yen from above ¥99.95 and short Aussie-dollar below $1.0210 – at ¥100.07 and $1.0150 respectively. Yesterday I closed out half of each position, for a gain of 170-pips in Aussie-dollar and 193-pips in dollar-yen. Given the recent strength of the respective moves (magnitude plus speed), I won’t rule out a technical correction; hence the profit taking. I envisage reselling Aussie-dollar and rebuying dollar-yen at some point this week, especially if US data remains strong.


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

I sold sterling-dollar at $1.5533 on 3 May. A bearish daily close confirmed the downside implications of a Shooting Star candlestick set at the top of a rising channel. The trade aims to capitalise on weakness linked to expanded Bank of England stimulus speculation ahead of Mark Carney’s entry as governor. Prices are now testing the channel bottom at $1.5357, with a break lower exposing the $1.5195 to $1.5249 area. I will continue to hold short but adjust my stop-loss to the breakeven level.


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

My patience on the long dollar-yen set-up above ¥100 paid off last week, but I exited before the week was out. I was looking to play an aggressive break but momentum was restrained. I am increasingly concerned of a risk aversion move, and dollar-yen would sink like all yen crosses. As a trade, I’d prefer euro-yen below ¥130. Should risk hold, I like a sterling-dollar channel rebound above $1.5425. My non-risk, euro-trouble trade remains euro-sterling below £0.8400.