FOREX ANALYST PICKS
FOREX STRATEGIST
JOHN KICKLIGHTER
My pick: Short euro-dollar and Kiwi dollar-dollar
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
Neither the euro-dollar nor Aussie dollar-dollar short setups from last week triggered, as risk appetite trends bounced and speculation for the end of QE2 failed to catch traction for the dollar. That said, I’m not at all confident in this positive drift for risk. I’ll keep the euro-dollar break below $1.4000 in mind. In the meantime, I think Kiwi dollar-dollar is strong beyond even an optimistic skew on fundamentals. Here I’m looking for a sharp reversal below $0.8050.
FOREX STRATEGIST
ILYA SPIVAK
My pick: Long dollar-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
The dollar-Canadian dollar produced a bullish inverse head and shoulders chart pattern above the May low, confirming a reversal with a break above the formation’s neckline at Ca$0.9667. The pair is pulling back from falling trend line resistance set from mid-October 2010, but I expect a reversal as risk aversion returns as the expiry of QE2 looms. Dollar-Loonie shows a strong inverse correlation with the S&P 500, and a move lower in US shares ought to push the pair higher. Look for a daily close above Ca$0.9760 to enter long.
FOREX STRATEGIST
JOEL KRUGER
My pick: Buy dollar-Canadian dollar
Expertise: Technical analysis
Average time frame of trades: 4 weeks
The market has finally managed to mount a recovery since basing out by fresh multi-month lows in the Ca$0.9400s and could be in the process of attempting to establish a more meaningful base. The latest break and close back above Ca$0.9700 triggers an inverse head and shoulders pattern projecting additional gains towards parity over the coming days. Look for setbacks supported above Ca$0.9600 on a daily close basis. Buy at Ca$0.9700 for a Ca$1.0100 objective. Stop at Ca$0.9540.