My pick: Short Aussie dollar-dollar, Short Aussie dollar-Canadian dollar
Expertise: Fundamental and Technical Analysis with Risk Management
Average time frame of trades: 1 day to 1 week
The picture of risk trends and individual fundamental paths have blurred significantly this past week, following the devastating Japanese quake and the EU’s summit. Despite this, I maintain my short entry order on Austrailian dollar-dollar once it breaks $0.99. As a more risk-neutral pair that will take a little more time to play out, I also like the Australian dollar-Canadian dollar on a large head-and-shoulders reversal below $0.97 with a 200 point initial stop and first target.
My pick: Remain short on New Zealand dollar-dollar
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months
I sold New Zealand dollar-dollar on Feb 28 at $0.7516. The subsequent selloff has met my initial soft target at $0.7362 and I have now moved my stop-loss to the break-even point. A strong correlation between New Zealand dollar-dollar and the MSCI World Stock index points to continued losses amid increasingly widespread risk aversion. I will look for a daily close below $0.7322 to trail my stop lower to lock in a portion of floating profits and revise my soft target to $0.7160.
My pick: Short euro-dollar at $1.3925
Expertise: Technical Analysis
Average time frame of trades: 1 week to 6 weeks
The latest topside failure above $1.4000 and ahead of $1.4035 suggests that the market has stalled for now and is in the process of carving out some form of a top. Tuesday’s break back below Monday’s low confirms this and now opens the door for a potential double top formation to be confirmed on a break below neckline support at $1.3750. Below $1.3750 then accelerates towards a measured move objective at $1.3500. Short at $1.3925 for a $1.3525 objective; stop at $1.4125.