My pick: Buy dollar-yen at ¥79.50
Expertise: Classic technical analysis
Average time frame of trades: 1 month-12 months
This market has been under intense pressure for several months, with the price dropping to fresh multi-year lows and now quickly closing in on a retest of the 1995 record lows by ¥79.75. Despite the severely oversold technical studies, we can not rule out a test and break below the critical barriers by ¥79.75. But any further declines below there should be limited, with the greater risk then for a major upside correction back in favor of the US dollar. Target ¥100 and place a stop at ¥73.50.
My pick: Long dollar-Swiss franc above SFr1.00 post Fed announcement
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
Timing is ticking until to tonight’s Federal Open Markets Committee (FOMC) decision. With that in mind, my carryover euro-US dollar short has been taken off after hitting its first target, while the second half was out at breakeven on a trailed stop. Heading into the Fed, my favorite setup is actually the lesser followed dollar-Swiss franc. A move above SFR1.00 after the release will be my trigger with a stop and a first target both 100 points away.
My pick: Short euro-dollar above $1.3840
Expertise: Global macro
Average time frame of trades: 1 week-6 months
Euro-dollar is carving out a rare but potent bearish diamond top formation below $1.42, which has been both a significant upside and downside barrier since the second half of 2008. Risk-reward considerations look favourable to enter short above $1.3840 and as close as possible to $1.40, targeting a move to August’s swing top at $1.3338. A stop-loss will be activated on a daily close above $1.4085. An entry above $1.3888 allows for a stop on a close above $1.4162, the 15 October wick high.