My pick: Buy dollar-yen at ¥79.50 (100 objective stop at ¥86.60)
Expertise: Classic technical analysis
Average time frame of trades: 1 month – 12 months
This market has been under intense pressure over the past few months, with the price dropping relentlessly to multi-year lows and now quickly closing in on a retest of the record lows from 1995 at the ¥80.00 level. Despite the oversold technical studies, we cannot rule out a test and break below the critical barriers at ¥80.00. At this point, any further declines should be limited, with the greater risk of a major upside correction back in favour of the US dollar.
My pick: Pending short euro-dollar below $1.38
Expertise: Fundamental and technical analysis with average time Average time frame of trades: 1 day – 1 week
Volatility has held consistent, but so has technical congestion. This lack of conviction undermined my sterling-dollar long above $1.60. This week, I am waiting for a confirmed reversal from euro-dollar below $1.38 (with low size and an initial stop of 150 basis points). In an effort to limit exposure to stimulus expectations with the dollar or risk trends, I am also looking at a potential Australian dollar-New Zealand dollar break below NZ$1.30 (stop and first target: 150 basis points).
My pick: Short euro-dollar (pending)
Expertise: Global macro
Average time frame of trades: 1 week – 6 months
Euro-dollar has just lost step ahead of the $1.42 figure, which has acted as both support and resistance since 2008. Weekly charts reveal a bearish shooting star candlestick pattern, hinting at a reversal lower. Shorter term, the eight-hour chart shows prices carving out a head-and-shoulders top with a neckline at the $1.38 figure. Negative relative strength index (RSI) divergence reinforces the case for a downside scenario. Look for a daily close below the neckline to enter short, targeting $1.3340.