My pick: Short Aussie dollar-dollar, Long dollar-Swiss franc
Expertise: Fundamental and Technical Analysis with Risk Management
Average time frame of trades: 1 day to 1 week
Opposing views on the yen with my long dollar-yen and short euro-yen tripped a first target on the first and stop on the second. The notional difference between the two was substantial; but position size actually evened the two out. I’m still waiting to jump on an Aussie dollar-dollar short should it drop below parity and $0.99. In the meantime, I like a purely speculative long dollar-franc above SFr0.9330 with a 125 stop and first objective.
My pick: Short euro-dollar up to $1.3860
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months
Euro-dollar is testing trend defining resistance at a falling trend line set from the record high in July 2008. Speculative net short positions have returned to the highs noted in October 2009 and 2010, where they foreshadowed a significant top in the currency pair within 2-4 weeks. Negative RSI divergence and a bearish Inverted Hammer candlestick reinforce the case for a downside scenario. I will enter short on a daily close below $1.3860, initially targeting $1.3485. A stop will be triggered on a close above $1.4035.
My pick: Short euro-dollar at $1.4025
Expertise: Technical Analysis
Average time frame of trades: 1 week to 6 weeks
The latest surge through key resistance by $1.3975-$1.4000 looks to be a little too aggressive in our opinion and from here we would not expect to see sustainable gains above $1.4000. While we would not rule out the potential for an eventual assault on the November 2010 highs at $1.4280, the risks from here are for a shorter-term bearish reversal towards the $1.3600-$1.3800 area. Position: short at $1.4025 for $1.3625.