DailyFX Analyst Picks - David Song

Exit NZD/JPY

Unknown Field-Author — Fri, 20 Nov 2009 13:25:28 GMT

The NZD/JPY tumbled lower for the second-day and slipped below the 100-day SMA (64.38) to a low of 64.04 on Friday, and the sharp sell-off took out the short position from 66.46, with a gain of 290+pips. However, as the weekly decline stalls ahead of the November low at 63.21, we may see a corrective retracement over the following week, and I will wait for a directional bias before taking on another trade.

Flat USD/CHF

Unknown Field-Author — Thu, 19 Nov 2009 14:12:48 GMT

Following up with the USD/CHF trade from the previous week, the pullback last Friday triggered the long entry at 1.0153, the 20-Day SMA on 11/12 however, the sell-off earlier this week took out the stop I set at 1.0083, the 10/20 low and ended up missing the rally on Tuesday. As the pair continues to hold the narrow range from the beginning of this month, we would need to see a breakout this week or during the first-half of the following week to see the double-bottom formation play out, and I will wait for further confirmation before taking on another USD/CHF trade.

Stay Short NZD/JPY

Unknown Field-Author — Wed, 18 Nov 2009 12:53:13 GMT

Following up with the NZD/JPY trade, after shorting at 66.46, the pair rose to a high of 66.88 this week and stalled out ahead of the stop at 66.93, the 20-Day from 11/9, and continues to trade within the 20-Day (66.60) and 50-Day (65.94) moving averages. As the kiwi-dollar fails to retrace the sell-off from the end of October, with the Reserve Bank of New Zealand pledging to keep the benchmark interest rate at 2.50% going into the following year, we are could see the pair hold within a narrow range ahead of the interest rate decision next month. However, the pair looks poise to break to the downside as it continues to post lower highs, and I will maintain the target at 63.95, the 100-Day SMA from 11/9, with the stop at 66.93 as the rally tapers off.

Pending Short EUR/GBP

Unknown Field-Author — Tue, 17 Nov 2009 14:03:46 GMT

The EUR/GBP broke out of its recent range and slipped below the 200-Day SMA (0.8868) to reach a low of 0.8849 on Tuesday however, the lack of momentum to push below the 100-Day SMA at 0.8841 may lead the pair to trend sideways over the remainder of the week as the RSI approaches oversold territory. Nevertheless, as the euro-pound continues to mark lower highs and lower lows following the head-and-shoulders top formation during the previous, it looks as though the pair will continue to retrace the advance from August following the major reversal. As a result, I will wait for a corrective retracement to follow before taking on a position following the four-day decline and will look to sell the pair at 0.8989, the 20-Day SMA, and will place the target for the 100-Day at 0.8841, with the stop at 0.9052, the 50-Day SMA.

Stay Short NZD/JPY

Unknown Field-Author — Mon, 16 Nov 2009 14:13:56 GMT

The NZD/JPY continued to hold the range from the previous week and slipped to a low of 65.95 during the overnight session however, the overnight decline looks to have stalled ahead of the 50-Day SMA (65.84) and bounced back during the overnight session to remain little changed from Friday. Nevertheless, as the economic docket for New Zealand remains fairly light for this week while the kiwi-yen continues to trade below the 20-Day SMA, I will maintain the short from 66.46 and keep the target at 63.95, the 100-Day SMA from 11/9, with the stop at 66.93, the 20-Day.

Stay Short NZD/JPY

Unknown Field-Author — Fri, 13 Nov 2009 13:16:50 GMT

Following up with the NZD/JPY short recommendation from Monday, the kiwi-yen continued to close below the 20-day SMA this week and as a result, I placed a short-entry at 66.46 following the quarterly retail sales report on Wednesday. The sell-off on Thursday triggered the sell entry and the trade is currently in-the-money, and I will maintain the position over the following week as the economic docket for New Zealand remains fairly light. I will maintain the target at 63.95, the 100-Day SMA from 11/9, and have placed the stop at 66.93, the 20-Day SMA.

Pending Long USD/CHF

Unknown Field-Author — Thu, 12 Nov 2009 12:21:25 GMT

The USD/CHF slipped to a low of 1.0034 this week and looks to have formed a double-bottom following the October low at 1.0032, and the pair looks poised to retrace the sell-off from the previous month as the exchange rate nears parity. As a result, I have placed a long entry at 1.0153, the 20-Day SMA, and will target the November high at 1.0341, with the stop at 1.0083, the 10/20 low.

Pending Short NZD/JPY

Unknown Field-Author — Wed, 11 Nov 2009 13:24:07 GMT

Referring to the short NZD/JPY recommendation from earlier this week, the pair crossed above the 20-Day SMA (currently at 67.00) to reach a high of 67.10, but failed to hold above the moving average as the pair closed at 66.77. Moreover, the kiwi-yen remains lower on Wednesday after reaching a high 66.89, and the lack of momentum to trade above the 20-Day may lead the pair to fall back towards the November low as economists forecast retail spending in New Zealand to slump 0.1% in the third quarter. As a result, I will set a short entry at 66.46, the previous week’s high, if the pair continues to hold below the 20-Day at the close of the U.S. trade, and will target 63.95, the 100-Day SMA on 11/9, with the stop at 66.95, the 20-Day moving average from Monday.

Look for EUR/GBP Breakout

Unknown Field-Author — Tue, 10 Nov 2009 12:20:53 GMT

The EUR/GBP held a narrow range throughout the week following the head-and-shoulders top formation during the previous week, and the pair may continue to retrace the advance from August as the 20-Day SMA (0.9049) looks to cross below the 50-Day SMA at 0.9035. However, as the euro-pound find near-term support around 0.8930-40 (38.2% Fib of the 12/2009 high to the 6/2009 low), we may see the pair continue to hold a narrow range throughout the month as investors weigh the outlook for future policy. As a result, I will wait to see a directional bias before entering a trade, and may look to short the pair as the October rally stalls ahead of the March high at 0.9497.

Pending Short NZD/JPY

Unknown Field-Author — Mon, 09 Nov 2009 12:31:47 GMT

Following up with the NZD/JPY short recommendation from the end of October, the pair slipped below the 50-Day SMA (58.96 on 10/30) and failed to trigger the sell entry I had at 68.06, the 10-Day SMA on 10/30, and I closed out the order as the pair continued to hold below the 20-Day SMA at 67.06. Nevertheless, as the Reserve Bank of New Zealand pledges to maintain the benchmark interest rate at the record-low and maintains a dovish outlook for future policy, the kiwi-yen may continue to retrace the advance from earlier this year as investors scale back expectations for higher borrowing costs in the $128B economy. As a result, if we see the pair continue to hold below the 20-Day SMA (currently at 66.93) following the quarterly retail sales report due out on Wednesday at 21:45 GMT, I will place a short-entry at 66.46, the previous week’s high, and will target the 100-Day SMA at 63.95, with the stop at 66.93, the 20-Day SMA.

Flat GBP/JPY

Unknown Field-Author — Thu, 05 Nov 2009 12:56:06 GMT

The GBP/JPY surged to a high of 151.38 during the previous day and triggered the stop at 150.87, the 9/4 low, and the pound-yen may continue to retrace the decline from the end of October as investors maintain long-term expectations for higher interest rates in the U.K. The Bank of England held borrowing costs at the record-low and expanded its asset purchase program to GBP 200B amid expectations for an increase to GBP 225B, and the British pound may appreciate throughout the remainder of the year as policy makers hold a hawkish outlook for inflation. However, as the central bank continues to see a risk for a protracted recovery, instability in the banking sector paired with the downturn in the labor market may continue to drag on the exchange rate as investors weigh the prospects for a sustainable recovery. Nevertheless, as the GBP/JPY fails to mark higher highs and continues to hold the range from the end of the previous month, I will wait to see a directional bias before taking another pound-yen trade.

Stay Short GBP/JPY

Unknown Field-Author — Wed, 04 Nov 2009 12:11:45 GMT

Following up with the GBP/JPY short recommendation from earlier this week, the pound-yen rallied for the second day to reach a fresh weekly high of 150.61, and triggered the sell entry I had at 149.68, the 10-Day SMA. The 200+pip rally overnight almost took out the stop I set at 150.87, the 9/4 low however, as market participants speculate the Bank of England to expand its asset purchase program to GBP 225B from GBP175B at its rate decision tomorrow, the pair may retrace the advance from the previous month as policy makers take additional steps to stimulate the ailing economy. As a result, I will maintain the short position and will keep the target at 146.31, the 9/24 low but nevertheless, I may look to tighten the stop to breakeven if the pound-yen slips back below the 10-Day SMA during the U.S. trade.

Flat EUR/GBP

Unknown Field-Author — Tue, 03 Nov 2009 12:14:40 GMT

Following up with the EUR/GBP sell recommendation from the previous week, the pair failed to trigger the short-entry I had at 0.9180, the 20-Day SMA on 10/27, and I ended up missing the drop to 0.8912 towards the end of the previous week. However, as the Bank of England and the European Central Bank are scheduled to hold their policy meeting on Thursday, Cable and euro may continue to trend sideways over the next 48 hours of trading, and I will sit on the sidelines for the time being as investors weigh the outlook for future policy. However, as the European Union forecasts GDP in the U.K. to outpace growth in the euro-region, we may see the euro-pound continue to retrace the advance from August as economic conditions improve.

Pending Short GBP/JPY

Unknown Field-Author — Mon, 02 Nov 2009 13:30:34 GMT

The GBP/JPY tumbled lower for the second day and slipped below the 200-Day SMA (147.77) to reach a low of 145.78 during the overnight session, and the Japanese yen may continue to strengthen against the British pound as investors scale back their appetite for higher-yielding investments. As a result, we may see the pair continue to retrace the advance from the previous month and may trend lower throughout the week as market participants speculate the Bank of England to expand its asset purchase program in an effort to stimulate the ailing economy. However, after tumbling 400+pips during the last two trading sessions, I will wait for a corrective retracement before attempting to short the pound-yen, and will look to place a sell entry at 149.68, the 10-Day SMA, and will target 146.31, the 9/24 low, with the stop at 150.87, the 9/4 low. However, if the GBP/JPY fails to reach the entry by the U.S. close on Wednesday, I will take off the order ahead of the Bank of England rate decision due out on Thursday at 12:00 GMT.

Pending Short NZD/JPY

Unknown Field-Author — Fri, 30 Oct 2009 11:39:17 GMT

The NZD/JPY tumbled lower this week and slipped to a low of 64.74 during the previous day, and the lack of momentum to hold above the 20-Day SMA may lead the pair to retrace the advance from earlier this year. However, as the kiwi-yen continues to close above the 50-Day SMA at 65.36, we may see the pair bound back over the following week to search for a top. Nevertheless, as the economic docket for New Zealand is expected to reinforce a weakened outlook for growth and inflation, with economists forecasting the unemployment rate to reach a nine-year high of 6.4% in the third quarter, fears of a protracted recovery is likely to drag on the exchange rate as the Reserve Bank of New Zealand pledges to hold the benchmark interest at the record-low throughout the first-half of 2010. As a result, if we see the pair cross back above the 20-Day SMA at 67.06 later today, I will open a sell entry at 68.06, the 10-Day SMA, and will target the 50-Day SMA at 65.40, with the stop at 68.91, the 10/26 close.

Flat GBP/JPY

Unknown Field-Author — Thu, 29 Oct 2009 11:11:10 GMT

The GBP/JPY failed to hold below the 50-Day SMA (148.60) at the end of the U.S. trade and I closed out the position at 148.70, and ended up missing the overnight decline to 147.68. As the pound-yen finds near-term support ahead of the 200-Day SMA (147.58), the pair may continue to retrace this week’s decline as the economic outlook for the U.K. improves. As a result, I will stay flat against the GBP/JPY for the moment and will wait for further confirmation before trading the pair again, and may look to sell today’s rally if it fails to close above the 10-Day SMA at 149.78.

Stay Short GBP/JPY

Unknown Field-Author — Wed, 28 Oct 2009 11:05:50 GMT

Following up with the GBP/JPY short recommendation from earlier this week, the pair rallied to a high of 151.21 on Monday to trigger the sell entry I placed at 150.93, the 5/7 high, and the trade is currently in-the-money as the pair slips to a fresh weekly low of 148.38. However, as the GBP/JPY bounces back from the low and holds around the 50-Day SMA at 148.60, we may see the pound-yen pare the weekly decline over the next 24 hours of trading as market participants anticipate the economic docket to show a rise in U.K. mortgage approvals on Thursday. As a result, if the pair retraces the overnight decline and ends the day above the 50-Day moving average, I will look to close the position ahead of the target as the trade remains in-the-money. However, if we see the GBP/JPY trend lower throughout the U.S. trade and closes below the 50-Day, I will maintain the target at 147.20, the 200-Day SMA on 10/26, with the stop at 152.38, the 7/9 high.

Pending Short EUR/GBP

Unknown Field-Author — Tue, 27 Oct 2009 11:56:29 GMT

After sitting on the side lines during the previous week, the EUR/GBP slipped back below the 10-Day moving average at 0.9180 and looks to have put at top in place this month after reaching a high of 0.9414 on 10/13, and the pair may continue to trend lower as the British pound outperforms. The lack of momentum to push back above 0.9500 favors a bearish outlook for the euro-pound, and the pair may retrace the previous month’s advance to test the 200-Day SMA for near-term support. However, we are likely to see a corrective retracement following the two-day decline and I have placed a sell entry at 0.9180, the 20-Day SMA, and have set the target to 0.8877, the 200-Day SMA, with the stop at 0.9276, the 10/6 high.

Pending Short GBP/JPY

Unknown Field-Author — Mon, 26 Oct 2009 11:35:16 GMT

The GBP/JPY fell back from the monthly high (153.26) and tipped lower for the second day to reach a low of 149.15, but the lack of momentum to break below the 50-Day SMA (148.86) may lead the pair to hold a broad range over the coming months as investors weigh the outlook for future policy. As the economic docket for the U.K. remains fairly light over the next 24 hours of trading, we may see the pound-yen continue to hold above the 50-Day as risk appetite returns to the market however, we may see the pair break out of the September range later this week as U.K. mortgage approvals are forecasted to reach its highest level since April 2008. As the economic calendar is expected to reinforce an improved outlook for the U.K., we may see the GBP/JPY continue to retrace the sell-off from August but nevertheless, as investors speculate the Bank of England to expand policy further in the second-half of the year, expectations for further easing is likely to weigh on the exchange rate as the economy fails to emerge from the worst recession since the post-war period.As a result, if the GBP/JPY hold lower on the day, I will place a sell-entry at 150.93, the 5/7 high, at the end of the day and will place the objective at 147.20, the 200-Day SMA, with the stop at 152.38, the 7/9 high.

Pending Short USD/CAD

Unknown Field-Author — Fri, 23 Oct 2009 11:05:29 GMT

The Canadian dollar weakened against the greenback, with the USD/CAD rising to a weekly high of 1.0585 however, the lack of momentum to retrace the decline from earlier this month may lead the dollar-loonie to trend lower over the following week as the pair fails to hold above the 20-Day SMA at 1.0535. As market sentiment improves, the loonie is likely to benefit as risk trends continue to dictate price action in the currency market, and the economic docket is likely to reinforce an improved outlook for the world’s eighth largest economy as policy makers see the nation emerging from the recession. Nevertheless, the recent strength in the greenback may continue to push the pair high over the following week, and I will wait for the pair to find a top before attempting to short the USD/CAD. As a result, if pair fails to test this week’s high at 1.0585 over the coming week, I will look to short the dollar-loonie at 1.0589, the 9/17 low, and will set the target to 1.0266, the 10/20 low, with the stop at 1.0717, the 10/6 high.

Flat GBP/JPY

Unknown Field-Author — Thu, 22 Oct 2009 13:43:27 GMT

The 230+pip rally in the GBP/JPY triggered the stop at 151.08, the 8/27 low, on the trade from earlier this week, and the pair may continue to retrace the sell-off from the previous month as investors ramp up long-term expectations for higher interest rates in the U.K. However, as the RSI approaches overbought territory, the lack of momentum to push above the previous month’s high (153.28) may lead the pound-yen to halt the October rally, and may continue to hold below the 100-Day SMA (153.08) as investors weigh the outlook for future policy. As a result, I will wait for further confirmation before attempting to catch a retracement, and am inclined to sell the pair again as the 50-Day SMA (149.22) approaches the 200-Day at 149.93.

Flat GBP/JPY

Unknown Field-Author — Thu, 22 Oct 2009 13:27:24 GMT

Stay Short GBP/JPY

Unknown Field-Author — Wed, 21 Oct 2009 11:21:59 GMT

Following up with the GBP/JPY short trade from earlier this week, the seven-day rally triggered the entry I placed at 149.54, the 50-Day SMA on 10/19, with the overnight rally losing steam ahead of the stop I placed at 151.08, the 8/27 low. As the RSI jumped higher and approaches overbought territory, we are likely to see the pair retrace the advance from the previous week however, as economists forecast the U.K. economy to expand 0.2% in the third-quarter, the data may spur another rally in the British Pound cross rates. Nevertheless, as the pair continues to hold below 151.00, I will maintain the position for the time being.

Pending Short EUR/GBP

Unknown Field-Author — Tue, 20 Oct 2009 15:46:05 GMT

The EUR/GBP halted the three-day decline and rose to a high of 0.9154 during the overnight session however, the pair looks to be in the process of forming a head-and-shoulders top, with the 20-Day SMA (0.9191) holding just along the neckline. As a result, we should see the pair work its way back above the 20-Day but will need to hold below 0.9300 for the pattern to materialize. As a result, I will stay flat on the pair and will wait for further confirmation for a reversal.

Pending Short GBP/JPY

Unknown Field-Author — Mon, 19 Oct 2009 13:30:49 GMT

After holding the GBP/JPY short throughout the previous month, I exited the position earlier this month as the pair pushed back above the 10-Day SMA at 142.57 on October 9th. After rallying throughout the previous week, the pair has failed to retrace the decline from September, and will look to short the pair again as the Bank of England maintains a dovish outlook for inflation. As a result, I have placed a sell entry at 149.54, the 50-Day SMA and have set the target to 144.27, the 20-Day SMA, with the stop at 151.08, the 8/27 low.