My pick: Remain short sterling-dollar and short euro-dollar
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
Volatility has picked up to start this week, but it has only helped the setups I had from last week. The dollar-Swiss franc short from SFr0.8500 has run close enough to its record low to justify a good move. I have built up my sterling-dollar short with the break of $1.5925 in the meantime. Though there is some correlation to the cable, I would consider a $1.4000 break a clear sign from euro-dollar.
My pick: Short Australian dollar-dollar (short, $1.0780, stop $1.0860)
Expertise: Technical analysis
Average time frame of trades: 1 day to 4 weeks
We had sold the market in the previous week by $1.0750 and actually exited and then re-entered at a better level by $1.0780 as per the instruction of our model. Either way, the trade is looking quite good with the market most recently breaking below $1.0650 to trigger a double top on the daily chart exposing an even deeper drop, potentially below $1.0500 and towards the $1.0200 area further down. Fundamentals are also aligning with a massive wave of risk off selling weighing on the risk correlated Australian dollar.
My pick: Long dollar-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
Expectations of global slowdown are weighing heavily on the S&P 500, with prices now forming a large head and shoulders top and pointing to sustained risk aversion even if the current bout of EU-driven panic is pacified. The off-the-charts inverse correlation between dollar-Canadian dollar and the US stocks benchmark index hints the pair will mount a structural advance as shares embark on a large-scale decline. I will look to enter on a pullback to Ca$0.9678, or a weekly close above Ca$0.99.