My pick: Short Kiwi dollar-dollar, Short euro-dollar, long dollar-yen
Expertise: Fundamental and Technical Analysis with Risk Management
Average time frame of trades: 1 day to 1 week
None of my setups from last week played out as a meaningful risk aversion move was still absent. We may have seen such a development with the start of this week, but that isn’t absolutely necessary for my New Zealand dollar-dollar short to hit its $0.7780 first objective ($0.8010 stop). I am looking for euro-dollar to edge back up to $1.43 for a better price should a true reversal form with the channel break. A dollar-yen ¥82.50 long is my risk offset.
My pick: Short euro-dollar
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months
Euro-dollar has taken out support at the bottom of a rising channel set from mid-February amid resurgent sovereign debt fears. Indeed, an average of Portugal’s, Italy’s, Ireland’s Greece’s and Spain’s 5-year CDS rates began this week at the highest since January. Positioning hints a near-term top is in place below the $1.45 figure, opening the door for downswing. I will enter short from here at $1.4229, initially targeting the March 7 high at $1.4035. A stop-loss will be activated on a daily close above $1.4328.
My pick: Short sterling-dollar
Expertise: Algorithmic Trading
Average time frame of trades: 1 day to 2 weeks
I have been tracking crowd positioning on the sterling-dollar for quite a long time now, and a noteworthy shift towards crowd buying gives contrarians the signal that the pair could continue to go even lower. I would like to sell here, placing a stop against the high above $1.6430. However, continued corrections do seem likely, and my first target is $1.6150 with a return to $1.6000 likely on a break.