Investor confidence seemed to surge through the first few days of the New Years; but this advance certainly cannot sustain itself on a retracement of a previous shift in sentiment. With fundamentals still painting a dour forecast for growth and financial markets going forward, a genuine turn in risk trends and the yen crosses will need to find a more stable foundation. Read on to see what each of our analysts expects going forward and where the opportunities will be both short and long-term.

Chief Strategist - Antonio Sousa

My picks: Short AUD/JPY

Expertise: Economics and Behavioral Finance

Average Time Frame of Trades: 1 week - 3 months

In 2008, the Japanese yen was the main beneficiary of a violent wave of de-leveraging in financial markets and I expect this tendency to continue going forward. In fact, the Japanese yen is likely to appreciate against all of the world's most popular currencies because of the lack of confidence which continues to disturb the global financial system. Moreover, high yielding commodity currencies could be particularly vulnerable going forward. Indeed, with the world economy slowing down is reasonable to think that the demand for commodities will also begin to slow down which could only mean further losses to commodity sensitive currencies like the Australian Dollar.

Currency Strategist - Terri Belkas

My picks: Short EUR/JPY

Expertise: Fundamentals Combined With Technicals

Average Time Frame of Trades: 1 - 3 Days

EUR/JPY has spent the past few weeks consolidating below 130, and with a series of lower highs in place, risk/reward works in favor of selling the pair near current levels. Focusing on the 60 minute and 240 minute charts, there's clear falling trendline resistance from the December high of 131.05, so I think it would be beneficial to place a stop just above 128. Support may come in to play at the 38.2% fib of 115.89-131.05 and the 12/31 and 01/06 lows near 125.30, but a break lower is likely to see EUR/JPY target the 12/19 lows and 50% fib near 123.50/75.

Currency Analyst - David Rodriguez

My picks: Stay short the EUR/JPY, move risk to 129.73

Expertise: System Trading

Average Time Frame of Trades: 2-10 weeks

On 12-31 I called for a EUR/JPY short against 131, and so far the trade has paid dividends. I'd like to stay in the trade, but I'd also like to pull down max risk to recent spike-highs of 129.73. Profit targets are not yet set in stone, but a hold of clear congestion near 126.00 would signal that short-term rallies are likely.

Currency Analyst - Ilya Spivak

My picks: Short USDJPY (pending)

Expertise: Macro Fundamentals, Classic Technical Analysis

Average Time Frame of Trades: 1 week - 6 months

USDJPY bounced higher from support at the bottom of a bearish channel established from mid-July and is now testing a key support/resistance level at 93.17. The pair is showing the makings of an Advance Block bearish reversal pattern, with a bearish close on the current candle serving as confirmation. If this materializes, enter short to initially target the preceding swing low above 87.10. Longer term, the down trend aims to test 84.25, the record-lowest monthly close from 04/1995.

Currency Analyst - John Rivera

My picks:Long CAD/JPY

Expertise: Fundamentals Combined With Technicals

Average Time Frame of Trades: 5-10 Days

Despite the concerns over the labor market which ushered in a bout of risk aversion today and may continue through the end of the week, the longer-term trend appears headed toward an increase in risk appetite. Additionally, commodities have been advancing on the improved global outlook. Therefore, I have become bullish on the CAD/JPY and am looking for it to test the 100-Day SMA at 85.82. The pair has hurdled the 20 and 50-Day SMA's and has potential to reach 11/4 high of 87.51.

Currency Analyst - David Song

My picks: Short USD/JPY

Expertise: Fundamentals and Technicals

Average Time Frame of Trades: 2 - 10 Days

Broad based U.S. dollar strength pushed the USDJPY higher this week, and crossed above the 50-Day SMA for the first time since September, but the lack of momentum to move higher favors a bearish outlook for the pair. After peaking to a high of 100.58 on 11/4, the dollar-yen slipped to a low of 87.14 on 12/17, and as I expect the pair to hold its bearish trend over the near-term, we may see the pair work its way down towards 92.00-20 (38.2% Fib) over the remainder of the week. A break below this level could stoke increased selling pressures for the dollar-yen over the following week, which could drag the pair towards the 12/29 low of 89.75.