Chief Strategist - Antonio Sousa
My picks: Short EUR/GBP
Expertise: Economics and Behavioral Finance
Average Time Frame of Trades: 1 month
I expect the euro zone economy to deteriorate significantly in 2009, which could lead to a significant shift of interest rate differentials in favor of the U.S. dollar and keep the EUR/USD under pressure over the next few months. Also, I have been short EUR/GBP for some time and I expect the Sterling to rise further against the euro since the European Central Bank continues to underestimate the size of the financial crisis by keeping interest rates too high for too long.
Currency Strategist - Terri Belkas
My picks: Long EUR/JPY on a Break Above 115.50
Expertise: Fundamentals Combined With Technicals
Average Time Frame of Trades: 1 Day - 1 Week
My most recent EUR trade did not go well, as I was looking to sell EUR/CAD on a break below the 200 SMA. We did indeed see this break occur, but a subsequent rebound ended up stopping the position out.
Right now, EUR/JPY has been attempting to creep higher and has traded in a range of 114.50-116.00. This leaves the option open of either trading this range, or buying a bounce toward falling trendline resistance at 118.00. Immediate resistance sits at 115.50, so I would look for a break above this point as a buy signal. Stops can be placed below the lower end of the range.
Currency Analyst - David Rodriguez
My picks: Flat the EUR/JPY for now
Expertise: System Trading
Average Time Frame of Trades: 2-10 weeks
I was previously aggressively short the EUR/JPY, but last week I took full profits on the position and I continue flat the currency pair. Given overall market choppiness and indecision, I'm unwilling to place a trade until trends clear up. As such, I will remain flat Euro pairs for the time being and wait until clearer signal to once again short the EUR/JPY.
Currency Analyst - Ilya Spivak
My picks: Short EURGBP (pending)
Expertise: Macro Fundamentals, Classic Technical Analysis
Average Time Frame of Trades: 1 week - 6 months
The Euro lost bullish momentum having rallied decisively against the British Pound in recent months, breaking below rising trend line support that has held up the pair since late October. Prices found initial support above the 0.88 level near the January's swing low and bounced higher to re-test support-turned-resistance, offering compelling risk/reward parameters for a short position. That said, we don't have confirmation of a bearish reversal as of yet, so selling EURGBP immediately would be premature. Look to verify that the retracement has run its course and enter short, aiming for a break past 0.88 to challenge November's swing high at 0.8669.
Currency Analyst - John Rivera
My picks:Long EUR/USD
Expertise: Fundamentals Combined With Technicals
Average Time Frame of Trades: 2-4 Days
The EUR/USD has found support at 1.2700 and despite bearish German retail sales and producer price data today we are seeing the single currency move higher. The ECB is expected to keep rates on hold on Thursday and recent rhetoric from committee members hasn't changed that outlook. A test of 1.3000 looks very likely with the 20-Day SMA at 1.3144 as the most probable source of resistance.The 50-Day SMA at 1.3360 will be my second target.
Currency Analyst - David Song
My picks: Stay Short EUR/USD
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 2 - 10 Days
Even though the European Central Bank is widely expected to hold the benchmark interest rate steady at 2.00% during this week's policy meeting, comments from President Trichet at the World Economic Forum suggests that the central bank may lower borrowing costs further in March in order to maintain the 2% target for inflation. As a result, I expect the EURUSD to hold its bearish trend over the near-term, and will continue to hold my short position against the pair, with my target at 1.2600.
Currency Analyst - Joel S. Kruger
My picks: Buy EUR/USD @1.2920, for 1.3330; stop at 1.2690
Expertise: Technical Analysis
Average Time Frame of Trades: 1-3 Days
Despite the setbacks seen thus far today, the pair has been well supported in the 1.2700's over the past several days and could be once again looking to base out by Monday's low at 1.2705. A bullish hammer-like close on Monday is encouraging and we would expect to see some positive follow through into the US session with gains accelerating on a break back above 1.2915 (today's high). All relevant moving averages currently reside above the market and this would suggest that the pair is somewhat overextended and likely to revert back to its mean. Nevertheless, the overriding structure remains grossly bearish and we will only look to establish fresh longs on a break back above 1.2915.
Fundamental Catalyst - Improved market sentiment, increased global risk appetite and higher global equity prices is the name of the game here. The performance in the Euro has been directly correlated with the performance in the broader equity markets, with the continued slide in prices and deterioration in the global economy weighing heavily on the single currency. However, we are starting to see some potential for stabilization as reflected by daily flows. There has been a very noticeable pattern of late in which the Euro has been sold in the Asian and European sessions and then bought back more aggressively into the US session. Today, the currency is trading by daily opening levels and has failed in attempts to break lower. This in conjunction with the price action in USD/JPY which also trades marginally higher on the day should be used as a gauge for risk appetite and as such could act as the catalyst for some liquidation of safe haven trades. Euro well supported in 1.2700's. Trading below all relevant daily moving averages. Global equities stable today. Flows show demand for Euro in US session. This could translate into a rally today.