My pick: Short euro-US dollar pending
Expertise: Global macro
Average time frame of trades: 1 week-6 months
I took profits on the short euro-dollar position opened at $1.3762 in mid-November after prices blasted through resistance at $1.3280, the 23.6 per cent Fibonacci retracement of the 4-30 November fall. I suspect some further upside is ahead as jitters dissipate, but I remain very bearish given it seems only a matter of time before sovereign stress reappears. Near term, selling opportunities may emerge on a test of the 38.2 per cent and 50 per cent Fib levels at $1.3472 and $1.3626.
My pick: Long dollar-Loonie. Stay long dollar-yen and short Aussie-Loonie
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
We didn’t see a successful handover from EU crisis issues to risk aversion. That was an essential catalyst to maintain dollar appreciation. With that, Kiwi-US dollar would miss the trigger and my risk-based Aussie dollar-Canadian dollar is drifting. I’m holding on to my long-term dollar-yen view (though I would trim with a break back below ¥82). A new potential would be a long dollar-Loonie on a break above Ca$1.0080 with a 120-point stop and first target.
My pick: Short euro-dollar below $1.34 and $1.3470
Expertise: System trading
Average time frame of trades: 2-10 weeks
I remain bearish euro-dollar and think it set an important top above $1.42. Given seasonal tendencies for currencies to set annual highs and lows in the first and last month of the year, I think it could set a fresh low in December. This is consistent with the turn lower, and I think strength should be sold. $1.34 represents congestion resistance, while $1.3470 is the 38.2 per cent Fibonacci retracement of declines from $1.3785. A failure here would set up a short opportunity.