My pick: Remain short sterling-dollar and dollar-Swiss franc
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
My mix of trades from last week have whittled down. The short kiwi dollar-dollar was stopped and offset by the long Canadian dollar-yen from ¥83. I’m still holding on to the cable short from $1.6075 (stop $1.62, first target $1.5950) as it tests its former channel. A new pair to watch for this week is dollar-Swiss franc. It is on the verge of a major trend/channel reversal (SFr0.8550); but going with the trend has its merits.
My pick: Short Australian dollar-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 4 weeks
An intense rally came from the $1.0400 area, with the market stalling just shy of $1.0800. However, at this point, we would expect to see the market top out, with the price rallying to the upper Bollinger band. A closer look at the monthly chart shows this market well overdone, trading off of post-float record highs. Following the bearish monthly performance in May, the latest price action is only minor consolidation ahead of what we believe to be deeper setbacks. Position: short at $1.0750 for open objective; stop at $1.0910.
My pick: Long euro-dollar
Expertise: System trading
Average time frame of trades: 2 to 10 weeks
A sharp decline in foreign exchange options markets volatility expectations suggests that traders are looking for a slowdown in financial market tensions. The US Dow Jones Industrial Average has shot to significant highs amid the lull in market fears, and the safe-haven dollar is likely to decline further against the euro if this trend continues. With this in mind, I like going long against key lows at $1.4350, targeting $1.4700.