My pick: Long euro-sterling, short euro-Canadian dollar
Expertise: Fundamental and Technical Analysis with Risk Management
Average time frame of trades: 1 day to 1 week
My long dollar-yen position from ¥82.50 tripped its stop with a close below ¥80 with the dollar’s pervasive sell off. In the meantime, with the forthcoming ECB and BoE rate decisions, I’m looking specifically at euro-sterling as a reaction for the greater of the two disappointments. I think a close above £1.8950 would offer the clearest move. An alternative euro view rests with the potential euro-Canadian dollar break below pivot resistance at Ca$1.40.
My pick: Long dollar-yen (pending)
Expertise: Global Macro
Average time frame of trades: 1 week to 6 months
Dollar-yen has settled above support at ¥80.93 – the 50 per cent Fibonacci retracement of the rally from the 17 March low – after a botched attempt to mount a rally last week. I am treating the pullback from early April as a buying opportunity, expecting dollar-yen to rise along with US Treasury yields as the Fed allows QE2 to expire in June against a backdrop of increasing fiscal stress in the States. No entry point has materialised as yet and I will continue to monitor prices for viable opportunities to get long.
My pick: Buy dollar-Swiss franc at SFr0.8700; stop below SFr0.8500
Expertise: Technical Analysis
Average time frame of trades: 1 week to 6 weeks
The latest break to fresh record lows below SFr0.8700 threatens our longer-term recovery outlook. Still, we do not see setbacks extending much further and continue to favor the formation of a material base over the coming weeks for an eventual break back above parity. Look for the market to hold above SFr0.8600 on a daily close basis, while a daily close back above SFr0.8700 will relieve immediate downside pressures and accelerate gains. Only a weekly close below SFr0.8500 delays outlook.