My pick: Long sterling-New Zealand dollar at NZ$2.0500
Expertise: Technical analysis
Average time frame of trades: 1 month-12 months
A couple of weeks back we recommended buying this cross with the market trading at cyclical lows and looking poised for some major upside. The trade has proven to be profitable and it looks as though we could see an acceleration of gains following the latest surge beyond NZ$2.0700. Fundamentals have been supportive. We will now look to take advantage of the latest rally and mitigate risk on the trade. Target NZ$2.5000 and revise your stop to NZ$2.0290.
My pick: Stay long dollar-yen from ¥82/short Aussie-Loonie below Ca$0.99
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
We’ve had some significant technical and fundamental developments this past week; but this week’s liquidity issues will pose problems for cleanly trading breakouts and new potential trends. Though I am trading other dollar pairs, my favorite remains my long dollar-yen from ¥82. I have a tentative target of ¥85; but it is important to remain flexible. Also, the best potential trade remains a short Aussie dollar-Canadian dollar on the completion of a Ca$0.99 break on a head-and-shoulders pattern.
My pick: Stay long dollar-yen, short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week-6 months
Last week I bought dollar-yen at ¥83.08 and sold euro-dollar at $1.3762, betting on a correction in the anti-dollar rally built around QE2 expectations. The Fed delivered just about what had been priced in, robbing the advance of the impetus to continue. Dollar-yen was to capture a rebound in US yields while euro-dollar was opened to capitalise on a risk appetite reversal. They are behaving as expected and I’ll keep them open, initially targeting $1.3310 and ¥85.87.