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

Though it took a little time, euro-dollar finally slipped below that substantial $1.3400 floor that represented the 2010-2011 mid-point. A forgiving stop at $1.3650 is warranted and the first target should equal risk while subsequent objectives – $1.3000, and $1.2800 for the conservative – reach for more. With risk aversion not yet in full swing, I’m also looking for a long-term bearish trend break from Kiwi dollar-dollar with a close below $0.7500.


My pick: Looking to buy dollar-yen
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week

We love the idea of looking to establish a long dollar-yen position at current levels but will have to wait for proper entry on the position as our in-house model is warning against taking the trade right now. Although retail positioning in long dollar-yen has scaled back dramatically in recent days from over 10:1, the ratio is still quite high and we need to wait for a normalisation before officially entering the position. Still we recommend keeping a close watch for the time being.


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

I sold euro-dollar at $1.4328 on 29 July, expecting a deepening EU debt crisis to hit the euro and a slowing global recovery boost safe-haven dollar demand. The pair has now surpassed my revised target at $1.3416 and I will trail my stop-loss to trigger on a daily close above $1.3975. However, positive divergence on relative strength studies hints a bounce may materialise before selling resumes, which I’ll treat as an opportunity to add to the short position.