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Forex Analyst Picks & Strategies

John Kicklighter RSS Twitter

Chief Currency Strategist
John Kicklighter

April 22, 2015 My Picks: Short: USDJPY; Pending: GBPUSD, GBPNZD, EURAUD
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 1 Week - 3 Months

There are two general themes that are building pressure: a dollar and risk correction. Both are in strong, persistent trends; but each move faces a threat of retreat. For the USD, the risk is more imminent but the corrective move is more likely to be temporary in nature - returning to the dominant trend more readily. For risk, years of speculative build presents are far more concerning situation; but the ultimate turn is more difficult to muster.

Whether a Dollar or Risk pullback, the USDJPY is well positioned - it would be a strong fundamental wind to see both occur at the same time. Marking traction is proving difficult, the next key level for progress is a break below 118.

In a Dollar pullback scenario, there is perhaps speculative access on many of the majors; but the GBPUSD carries the best profile to leverage a pullback. A move above 1.5000 when other Dollar pairs make breaks is my preferred view.

For a revival of the Dollar's strength, there are many prominent trends to choose from, but my view would be that follow through would be difficult to maintain without a correction of the Fed hastening the countdown to a hike, so I view NZDUSD breaking 0.7600 for a short-term outlook as better suited.

Outside of the majors and risk, GBPNZD is in a much larger inverse head-and-shoulders position. A break above 1.9550 would open the door to moving back within a much larger range (to the neckline).

EURAUD is another bigger picture technical setup with a unique play on fundamentals. If the Euro enters another general slump, I would look for a break below 1.3700 as a cue for a long-term trendline support on a 'rough' head and shoulders pattern.

For more details on these and other setups that interest me, visit me for on DailyFX on Demand when I cover the markets.

John Kicklighter RSS Twitter

Chief Currency Strategist
John Kicklighter

March 21, 2015 My Picks: Long: AUDNZD; Short: USDJPY; Pending: GBPJPY, GBPCAD, NZDUSD
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 3 Days to 2 Weeks

I am separating my trade setups into three major categories: dollar-based setups, risk-based setups, and 'other'.

From the Dollar, we have seen extraordinary volatility this past week following a record-breaking trend. The Fed reinforced a more hawkish time frame than all its counterparts, but the short-term speculative build up may have been too ambitious and thereby opens it up to a possible correction.

For anti-dollar moves, I would consider it a correction - a temporary pullback in a larger trend. I don't like pairs like EURUSD for such a move as its fundamental baggage is too significant. However, NZDUSD's offers a neutral counterpart and a 200-day SMA above at 0.7625. GBPUSD is another one should it break its 50 and 100-day SMAs at 1.5165 and 1.5400 respectively.

Dollar longs have great medium-term potential, but I'll wait until technicals clear up before I look for a setup to ride the continuity of the trend. Meanwhile, the 'risk' theme offers a headwind to a dollar pair. I am short USDJPY on last week's wedge break. The initial drive was based on a dollar drop, but the real momentum would likely have to fall to an unwind in risky positions and thereby carry trades. If risk aversion kicks in, I like USDJPY bearish up to 117.50 (anything below that denotes a more serious change in trend and a separate trade). I also like GBPJPY on the risk front with a break below 177.50 (though a positive risk argument could be made above 181).

And, for the 'other' category, I'm looking for pairs that don't have to rely on the Dollar or risk trends. There are a number, but I am keeping focus on a few that have the biggest fundamental potential or are more immediate technical pictures. I have put back on my AUDNZD long (now in the red) given its proximate fundamentals yet three decade low. I also like GBPCAD as it forms a steep and terminal descending wedge. A break above 1.8900 or below 1.8650 can instigate speculative follow through.

John Kicklighter RSS Twitter

Chief Currency Strategist
John Kicklighter

September 9, 2014 My Picks: Long: USDCHF, AUDNZD; Short EURUSD, EURJPY; Pending: USDJPY, AUDUSD
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 1 Day to 1 Week

The dollar has rallied for eight weeks now - and the USDollar is working hard at a record-breaking ninth. A return of FX-based (perhaps soon financial-wide) volatility and a slow rise in Fed rate forecasts gives the greenback a fundamental footing. However, the momentum of the currency itself outpaces what we have seen from this backdrop. The leverage comes from the dramatic retreat in its counterparts - namely the European currencies. This has benefited my positions, but I'm also growing leery of how much mana this benchmark can leach from its counterparts without a more stable footing of its own.

Yet, just because I am concerned or expectant of something doesn't mean I reposition or place a new trade. I like to see the market's confirmation of a theme and trend change. As such, with my existing positions, I have trailed stops rather than fully exited. For my the remaining half of my EURUSD short, I have shored up my stop to 1.3000 - which is 320 pips below my initial entry. A highly correlated pair, the remaining half of my USDCHF long (intended as a long-term setup) has a stop trailed up to 0.9250 - securing 365 pips.

As for my EURJPY short (from 137.20), I have kept the initial stop of 150 pips in place. With an equivalent first target, I have just twice just missed booking part of the trade. This pair has the Euro troubles to work with, but it has far more potential should there be a drop in risk trends. Generally I would see this as a decline in stocks.

Should there be a drop in the S&P 500 and equivalent global indexes, I'll look for USDJPY's reversal as this pair has posted the strongest run and disparity from its counterparts. I will determine the level when the fundamentals are in place - not the other way around.

Finally, my AUDNZD long position from 1.0800 is facing trouble in the form of the RBNZ rate decision. As such the remaining half of trade has a stop trailed up to 1.1100 to secure some profit.

John Kicklighter RSS Twitter

Chief Currency Strategist
John Kicklighter

July 23, 2014 My Picks: Long: USDCHF, AUDNZD; Short: EURJPY; Pending: EURUSD; Watching: GBPUSD, USDJPY
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 1 Day to 2 Weeks

Another wave of tempting technical breaks have flushed through my charts, this time on behalf of the Euro bears. However, the technical push doesn't garner the same kind of conviction from the fundamentals and market conditions. First and foremost, the backdrop for market activity is one of range. It is very difficult to jump start new trends - particularly ones that fight large, mature trends.

That said, the euro does have factors that could weigh it fundamentally - moving outside somewhat outside of the circle of the risk that is anchoring broader capital markets. Those are medium-term drivers though that are not generating a lot of kinetic energy.

I already have my toe in the 'euro short' with my EURJPY position (short at 137.20 and a 150 pip stop). WIth the recent push, EURUSD has tripped a level I have bene watching for some time as continuation of a trend that I have traded successfully twice. My concern with momentum is leading me to place a short entry order - just overnight in case I cannot make the decision while monitoring it - at 1.3500 flat and a stop of 90 pips.

There are other Euro trades that I like, but I don't think it is wise to build up such a heavy position when I'm not convinced of momentum. As such, I will not jump back into my EURAUD short that served me well the past three months.

For existing positions, my long-term USDCHF long trade is benefitting from the Euro's slide as the franc takes much of its guidance from its Eurozone trade partner. AUDNZD - which I am also long for a long-term position - is also up on the day after the firm inflation figure.

Other trades opportunities that I am watching include GBPUSD which is facing an inevitable, short-term breakout. I would prefer to see a bearish move below 1.7000 that is encoruaged by a neutral/dovish developments on the UK newswires (a very important aspect). And, keeping a wary eye on risk, I am also watching USDJPY should it move in on 100 which would certainly trigger on a big risk-off move.

Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.

Sign up for John’s email distribution list, here.

Ilya Spivak RSS Twitter

Currency Strategist
Ilya Spivak

September 18, 2014 My Picks: Long USD vs. EUR, CHF, AUD
Expertise: Global macro
Average Time Frame of Trades: 1 week - 6 months

I remain long the US Dollar against the Aussie, the Euro and the Swiss Franc as the ECB TLTRO launch and the Scotland Independence Referendum loom ahead.

I sold AUDUSD at 0.9186 and have since taken profit on half of the exposure, with the rest open to capture further downside momentum and a stop-loss adjusted to breakeven (0.9186).

On EURUSD, I sold the pair at 1.3644 in line with my long-term fundamental outlook and likewise took profit on half of the trade. The rest is active with a stop-loss at 1.3583, my initial objective.

Finally, I entered long USDCHF at 0.9068. Here too, profits on half of the exposure have been booked, leaving the rest in play with a stop-loss at the first target of 0.9114.

To receive the latest trade updates, sign up for Ilya's email list.

Ilya Spivak RSS Twitter

Currency Strategist
Ilya Spivak

September 17, 2014 My Picks: Long USD vs. EUR, CHF, AUD
Expertise: Global macro
Average Time Frame of Trades: 1 week - 6 months

I remain long the US Dollar against the Aussie, the Euro and the Swiss Franc ahead of the upcoming FOMC monetary policy announcement.

I sold AUDUSD at 0.9186 and have since taken profit on half of the exposure, with the rest open to capture further downside momentum and a stop-loss adjusted to breakeven (0.9186).

On EURUSD, I sold the pair at 1.3644 in line with my long-term fundamental outlook and likewise took profit on half of the trade. The rest is active with a stop-loss at 1.3583, my initial objective.

Finally, I entered long USDCHF at 0.9068. Here too, profits on half of the exposure have been booked, leaving the rest in play with a stop-loss at the first target of 0.9114.

To receive the latest trade updates, sign up for Ilya's email list.

Ilya Spivak RSS Twitter

Currency Strategist
Ilya Spivak

September 16, 2014 My Picks: Long USD vs. EUR, CHF, AUD
Expertise: Global macro
Average Time Frame of Trades: 1 week - 6 months

I continue to hold logn US Dollar exposing against the Aussie, the Euro and the Swiss Franc.

I sold AUDUSD at 0.9186 and have since taken profit on half of the exposure, with the rest open to capture further downside momentum and a stop-loss adjusted to breakeven (0.9186).

On EURUSD, I sold the pair at 1.3644 in line with my long-term fundamental outlook and likewise took profit on half of the trade. The rest is active with a stop-loss at 1.3583, my initial objective.

Finally, I entered long USDCHF at 0.9068. Here too, profits on half of the exposure have been booked, leaving the rest in play with a stop-loss at the first target of 0.9114.

To receive the latest trade updates, sign up for Ilya's email list.

http://bit.ly/WX6UIS

Ilya Spivak RSS Twitter

Currency Strategist
Ilya Spivak

September 15, 2014 My Picks: Long USD vs. EUR, CHF, AUD
Expertise: Global macro
Average Time Frame of Trades: 1 week - 6 months

I sold AUDUSD at 0.9186 and have since taken profit on half of the exposure. The rest remains open to capture further downside momentum with a stop-loss at breakeven (0.9186).

I entered short EURUSD at 1.3644 in line with my long-term fundamental outlook and took profit on half of the trade. The rest is active with a stop-loss at 1.3583, my initial objective.

I bought USDCHF at 0.9068 and booked half of my profits, leaving the rest open with a stop-loss at the first target of 0.9114.

To receive the latest trade updates, sign up for Ilya's email list.

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Currency Central Bank Rate
aud
2.25%
nzd
3.50%
eur
0.05%
cad
0.75%
gbp
0.50%
usd
0.25%
chf
-0.75%
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0.10%
Symbol Roll S Roll B
EUR/USD 0.0 0.0
USD/JPY 0.0 0.0
GBP/USD 0.0 0.0
USD/CHF 0.0 0.0
EUR/CHF 0.0 0.0
AUD/USD 0.0 0.0
USD/CAD 0.0 0.0
NZD/USD 0.0 0.0
EUR/GBP 0.0 0.0
EUR/JPY 0.0 0.0
GBP/JPY 0.0 0.0
CHF/JPY 0.0 0.0
Rates shown are the expected rolls in USD for holding one 10k lot today on a typical FXCM Standard account.