My pick: Short euro-dollar below $1.4000 and $1.3800
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week

Markets have been roiled, as building momentum in risk aversion met the accelerant of an earlier-than-expected US sovereign credit rating downgrade by Standard & Poor’s. Though much of the financial trouble seems to be centred around the Eurozone troubles, my euro-sterling short setup from last week caught no traction. Alternatively, the New Zealand dollar-dollar short below $0.86 did play out very well. Now, I am looking for clarity on euro-dollar with a move below $1.40 and then $1.38.


My pick: Looking to sell Swiss francs
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week

Markets have a way of accelerating relentlessly at the end of a trend and this is precisely the type of price action we have been seeing in the Swiss franc, as the currency rallies to record highs against the euro, dollar and sterling. This has been one of the most intense trends in recent years and with technical studies now violently overextended as the market goes parabolic, the risks for a major reversal have increased dramatically. I am not issuing a formal recommendation yet, but will be on the lookout for a top over the coming days.


My pick: Stay short euro-dollar (stop-loss: daily close above $1.4535)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

Renewed EU sovereign risk is being compounded by broader risk aversion amid a downward re-pricing of worldwide economic growth expectations. Investors interpreted the move in terms of its implications for the global recovery, fearing it would push yields higher and compound existing headwinds. The dollar’s safe haven credentials have allowed it to capitalise on this environment and I will continue holding short euro-dollar from $1.4328, initially targeting $1.3975.