Analyst picks for 9 October 2012

CURRENCY STRATEGIST
CHRIS VECCHIO

My pick: Long New Zealand dollar-dollar
Expertise: Combining fundamental and technical analysis
Average time frame of trades: A few hours to a few days

The Aussie-dollar long trade, after violently gyrating between gains and losses for two weeks, was closed for 100 pips: the surprise Reserve Bank of Australia rate cut was the nail in the coffin. A new long New Zealand dollar-dollar position was taken at $0.8175. I’m gearing up for a US dollar sell-off in October – with new stimulus measures expected from China (as the new leadership comes into play), as well as a positive market reaction from a Spanish bailout request.

STRATEGIST
ILYA SPIVAK

My pick: Stay short Aussie-Canadian dollar
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 week to 6 months

I sold Aussie-Canadian dollar at Ca$1.0441 on 14 August, to trade expectations of a pick-up in US economic growth, coupled with a slowdown in China. I added to the position at Ca$1.0370 on 24 August as the down move resumed after a brief rebound. Prices have now taken out support at Ca$0.9998 and stand to challenge the Ca$0.9932-55 area marked by the 61.8 per cent Fibonacci expansion level and the 23 May swing low. A break below that exposes Ca$0.9851.

CHIEF STRATEGIST
JOHN KICKLIGHTER

My pick: Short euro-dollar and Aussie-dollar; long dollar-yen
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

I moved too early on the sterling-dollar short last week. The pair is overbought and offered a break, but risk aversion didn’t take. I booked my dollar-yen long from ¥77.60 for 100 pips. I would like a further channel break above ¥79. The euro looks increasingly dubious and an eventual break below €1.2825 support seems inevitable. In the event of a short-lived risk run, I’ll look for an Aussie-dollar short from its trendline at Au$1.0500.