My pick: Stay short euro-US dollar
Expertise: Global macro
Average time frame of trades: 1 week-6 months
I sold euro-US dollar at $1.3315 on 15 December expecting the euro to slump in 2011 as economic growth in the currency bloc continues to underperform that of the US. Furthermore, the debt crisis is spreading from Euroland’s periphery to larger countries beyond the scope of a bailout using EFSF funds, like Spain. Prices have put in a bearish Harami candlestick below the $1.34 figure and I will remain short, initially targeting $1.2969 with a stop-loss on a daily close above $1.3499.
My pick: Long sterling-yen from ¥126.75, long dollar-Loonie above Ca$1.0000
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
We have an unusual couple of weeks ahead of us as the market develops a clearer bearing on speculative convictions (risk appetite) as liquidity returns to the market after the break. Therefore, it is good to take short-term setups – which US dollar-Canadian dollar and sterling-yen both seem to offer. After a 10-day decline, I’ll look for a dollar-Loonie move above parity and maintain a 75 point initial stop and target. The same goes for sterling-yen above ¥126.50 with a 100-point stop and first target for the trade.
My pick: Buy dollar-Swiss franc on a daily close above SFr0.9400
Expertise: Technical analysis
Average time frame of trades: 1-6 weeks
The latest price movement in this pair is certainly concerning with the market dropping to fresh record lows by SFr0.9300. But cyclical studies are showing that it is now oversold and any additional declines below SFr0.9300 are not seen as sustainable. Therefore, our strategy is to continue to take shots at buying, but ultimately, look for a break and a daily close back above SFr0.9400 to confirm a short-term reversal and relieve immediate downside pressures. Target SFr1.0000 and put a stop at SFr0.9240.