My pick: Short sterling-dollar; short dollar-yen below ¥78.00
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week

We witnessed an incredible swing in risk trends preventing both my sterling-yen and Aussie-dollar setups from triggering. The dollar-Canadian dollar managed to hit the Ca$0.9970 short, but it was best to bail with a small take. Volatility and event risk is a big threat this week. I’m looking for a short-term long dollar-Canadian dollar above Ca$1.0025, if risk aversion sets in. There are a lot of options for that scenario, including sterling-dollar reversing trend below $1.5950. It’s high risk though.


My pick: Sell Australian dollar-dollar at $1.0195
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week

We continue to classify the latest market rally as corrective, with the move putting in a lower top below the September high. The market is now rolling back over to keep the downtrend intact and open a bearish resumption. While selling rallies is probably too aggressive, we recommend being more cautious and looking for confirmation on a break back below $1.0200. Look for the break below $1.0200 to expose a fresh drop back towards $0.9385. Ultimately, only a sustained break back above $1.0750 would negate.


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

The restart of interest rate cuts and the spread of sovereign debt woes to Italy – a country almost certainly too big to be bailed out, even if EFSF leveraging schemes successfully bring the fund’s firepower up to the promised €1 trillion – hints the euro-dollar downtrend interrupted in early October is close to resuming. In the near term, I will look for either a push above $1.3825 to offer a short entry near $1.40 or break below $1.37 to signal bearish acceleration and trigger a sell trade.