Analyst picks for 30 April 2012
CURRENCY STRATEGIST
JOEL KRUGER
My pick: Looking to sell euro-dollar
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week
A closer look at the $1.3300 level shows a confluence of resistance, including the psychological barrier, some falling trend-line resistance off of the February 2012 peak, the upper Bollinger Band, and an attractive 78.6 per cent fib retrace off the most recent March-April $1.3385-$1.3000 high-low move. If our in-house risk management system permits, we like the idea of selling any rally overshoots in the $1.3300-$1.3350 area, anticipating a bear trend resumption. Above $1.3500 negates.
STRATEGIST
ILYA SPIVAK
My pick: Short gold (pending)
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
Traders seized on Ben Bernanke’s comments last week as a sign that QE3 is more likely. But this interpretation is incomplete and will likely be revisited, with stimulus bets unwinding as a result. While Bernanke kept the door open to QE3, he admonished against sacrificing price stability for employment, while Fed officials upgraded their US economic forecasts. This stands to trim demand for gold as an inflation hedge. I will look to sell on a weekly close below 1,648.11, a rising trend line from late 2008.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Kiwi-yen breakout, long euro-Swissie, Dax below 6,500
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
These are not the markets to expecting follow through in – unless stimulus-laden, speculative dreams catch up to fundamental reality and lead to a meaningful risk unwind. In the meantime, it’s best to take profit on last week’s Aussie-dollar break. I’ll play Kiwi-yen for the next break potential – preferably bearish. Meanwhile I like the Dax head-and-shoulders below 6,500 and await the Swiss National Bank’s move with my long euro-Swissie.