My pick: Short euro-dollar and long dollar-yen
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week

The big fundamental threats are fading into distant specters. For me, that signals a switch back to short-term setups rather than looking for big breaks and trends. None of my three thematic setups – dollar-yen, euro-dollar and euro-Swiss franc – from last week triggered. Going forward, I think a false break is a likely outcome for euro-dollar and I would like to play the reversal. Also, with the right fundamentals, I still like the long dollar-yen picture.


My pick: Short Kiwi dollar-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week

In the process of a corrective rally, since basing out by $0.8000 several days back, with the market rallying back above $0.8500. However, any additional gains from here are seen as limited, with a lower top sought out somewhere around $0.8500 in favor of the next major downside extension and bearish resumption. Look for a break back below $0.8250 to confirm and accelerate, while only a daily close above $0.8600 concerns. Position: short at $0.8525 for $0.8000 objective. Stop on daily close above $0.8600.


My pick: Stay short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I sold euro-dollar in late July at $1.4328 expecting escalation in the EU debt crisis compounded by a downward revision in investors’ expectations of global economic growth driving the dollar broadly higher on safe-haven demand. With hopes of QE3 fading after Ben Bernanke’s speech last week, I expect these larger themes to reclaim dominance over price action and will remain short, initially targeting a close below $1.3975. A stop-loss will be triggered on a daily close above $1.4535.