My pick: Short euro-US dollar near $1.41
Expertise: Global macro
Average time frame of trades: 1 week-6 months
Euro-US dollar has fallen sharply to start the week and a deeper downward correction looks likely given that the rally can be retraced back to August when the Fed first introduced the idea of QE2. Having managed the markets’ expectations, the FOMC delivered roughly what had been priced in, removing a great deal of uncertainty and opening the door for profit-taking. I look for a quick bounce to 1.41 from the rising channel support established in late October to go short.
My pick: Short dollar-Loonie below Ca$0.9975, long dollar-yen above ¥82
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
My long dollar-Swiss franc trade above SFr1.00 aspirations are too distant to be concerned with at the moment. For something that may happen within the next week, I’m looking for momentum on a dollar-Canadian dollar break below Ca$0.9975 (stop and first target at 100 basis points) or dollar-yen above ¥82 (stop and first target at 125 basis points). The caveat is that I need a confirmation risk aversion or appetite move from the S&P 500 to corroborate the dollar’s appeal.
My pick: Buy sterling-Kiwi at NZ$2.0500
Expertise: Technical analysis
Average time frame of trades: 1 month-12months
The market recently dropped back to retest and slightly exceed the record lows from late May 2010 but inability to establish any fresh downside momentum below the previous low suggests basing. We look for a longer-term base to carve out ahead of psychological barriers at NZ$2.0000. The daily chart shows the carving of a potential double bottom, and a break above the 2.2260 neckline will confirm and accelerate. Target NZ$2.5000 and place a stop at NZ$1.9500.