Analyst picks for 21 May 2012
CURRENCY STRATEGIST
JOEL KRUGER
My pick: Looking to buy dollar-yen
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week
This is a market in the process of carving a significant longer-term bottom, after posting record lows in 2011 by ¥75.50. As such, the latest pullback from yearly highs by ¥84.20 is classified as corrective, and the market is in the process of looking to carve a fresh higher low. Look to buy either on a dip to the 200-day simple moving average by ¥78.50, or on a break back above ¥80.60. Once triggered, look to hold the position for an eventual break back above ¥84.20.
CURRENCY STRATEGIST
ILYA SPIVAK
My pick: Stay short euro-dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I sold euro-dollar two weeks ago at $1.3004, as prices broke support at $1.3025 – initially targeting $1.2865 and $1.2674. The pair met the first objective and nudged the second, but oversold positioning suggests a bounce. I will look at an upward correction to add to the short exposure in the coming days, expecting Eurozone crisis jitters to return and push the pair lower. Significant resistance levels that may prove to cap gains from here stand at $1.2887 and $1.2962.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Short euro-dollar, long euro-Swissie and euro-Aussie
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
The risk aversion drive continued last week, and it looks to be getting serious. The euro-dollar short from $1.2935 moved to its target quickly. I will look for another leg to the bear run should it break $1.2625. In the meantime, I’ll stick with the “euro versus risk” theme in the euro-Australian dollar long from Au$1.2950 (against a Au$1.2800 stop). Finally, I’m waiting on the SNB to make a decision on euro-Swiss franc, as the Eurozone situation heats up.