My pick: Buy US dollar-Canadian dollar at Ca$0.9900
Expertise: Technical analysis
Average time frame of trades: 1 to 6 weeks
The daily studies are starting to look a little stretched and this is in conjunction with longer-term cyclical studies. These signs warn of a major base forming. This leaves us looking for opportunities to buy rather then to sell into the downtrend. A bullish outside week provides added confirmation of this and should help to accelerate gains over the coming days.
My pick: Short Australian dollar- US dollar (pending)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
The fundamentals point toward losses on Australian dollar-dollar: expectations of an Australian rate hike are withering as the consumer price index has underperformed and the economy is being weighed down by a slowdown in China. Meanwhile, the Aussie remains the most overvalued major currency against the greenback on a purchasing power parity basis. I will look for confirmation on a break below range support at $0.9868 to enter short, initially targeting $0.9586. A stop will be triggered on a daily close above $1.0007.
My pick: Short Australian dollar-dollar below 0.98
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day to 1 week
The potential in my sterling-Australian dollar and Canadian dollar-yen setups from last week dissipated (the first hit its first target and little more and the second never triggered). There are many opportunities out there, but the fundamentals are thin. A good stand out is the possible Australian dollar-dollar range break and long-term reversal below $0.98. A close below this level (preferably alongside a S&P 500 plunge) would be good for a 150 point stop and first target.