Analyst picks for 20 August 2012
CURRENCY STRATEGIST
CHRIS VECCHIO
My pick: Short Aussie-dollar and Aussie-Kiwi, buy dollar-yen dips
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few days
I took profits on my core Aussie dollar-dollar short from $1.0585 last week, and the pair was reshorted at $1.0450 as it appears a top has been carved out. Meanwhile, a string of better than expected US data has significantly curbed the likelihood of more quantitative easing, as evidenced by price action seen in the precious metals markets and the dollar-yen. Accordingly, although profits were taken, the dollar-yen should be bought on dips.
STRATEGIST
ILYA SPIVAK
My pick: Stay short Aussie-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
I sold Aussie dollar-Canadian dollar at Ca$1.0441 last week to gain exposure to expectations of slower Chinese growth against accelerated US economic expansion. The trade was triggered as prices broke support at the bottom of a rising wedge chart pattern, after completing a bearish evening star candlestick setup. The initial target is Ca$1.0281. Prices are making downside progress and I will continue to hold the trade. A stop-loss will be activated on a daily close above Ca$1.0598.
CHIEF STRATEGIST
JOHN KICKLIGHTER
My pick: Short Aussie-dollar, long euro-Swiss franc
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week
Range trading sterling-dollar proved ideal last week, and there is a need for both range and breakout options this week. Sterling-dollar is still a strong candidate (between $1.5750 and $1.5550). I also like euro-dollar and sterling-Canadian dollar setups. I think risk aversion will prevail and Aussie dollar-dollar below channel at $1.04 would be ideal. For non-risk dependency, I will stick with euro-Swiss franc and I like Aussie dollar-New Zealand dollar below NZ$1.3050.