DailyFX Analyst Picks - John Rivera

Stay Short NZD/USD

Unknown Field-Author — Fri, 20 Nov 2009 14:40:49 GMT

A break below the 50-Day SMA at 0.7297 triggered my short NZD/USD trade which is currently in the money. We have seen some support at 0.7200 but I maintain my target of 0.7080-11/2 low. 0.7100 may be a better point to set your limit. We have started to see risk appetite wane which is weighing on the high yielder. The Kiwi has benefitted from higher interest rate expectations on the back of tightening from the RBA. However, the yield outlook may start to fade as markets realize that its economy isn’t on the same footing as Australia’s which could also add to bearish sentiment.

Take Profits On GBP/JPY

Unknown Field-Author — Thu, 19 Nov 2009 14:34:49 GMT

I have been calling for a GBPJPY breakout all week and it finally came to fruition today. The pair saw losses accelerate with a break below the 200-Day SMA at 149.01 which triggered my short trade. I have taken profits at 14.51-50-Day SMA and would wait for a move below the technical level to take fresh positions. Downside risks remain with risk appetite waning and concerns over the country’s credit ratings. The U.K. budget deficit in October was the highest on record for the month at 11.4B. The BoE has left the door open to add to their asset purchase program which could equal more spending ahead, that combined with diminishing tax receipts should see pubic borrowing continue to grow. The next target for the pair could be the 11/2 low of 145.78.

GBP/JPY Pending Breakout

Unknown Field-Author — Wed, 18 Nov 2009 14:18:38 GMT

The CAD/JPY failing to make a clean break of the 20-Day SMA left me on the sidelines as yen crosses continue to show break out potential but have remained in their recent wedges. Monday, I was looking for a GBP/JPY bullish move and we have seen the pair continue to consolidate. I have softened on my bullish sterling bias but still look for a breakout for the pair. Of the yen crosses it has the clearest target levels with the 100-Day SMA at 151.34 and the 200-Day SMA at 148.92. A clean move above or below the technical marks would lead me to initiate the appropriate trade.

Short EUR/USD Pending

Unknown Field-Author — Tue, 17 Nov 2009 14:41:23 GMT

My short EURUSD trade was triggered last week when the pair briefly broke below the 20-Day SMA at 1.4882 but lack of follow through led to the position being stopped out when it pushed back above 1.5000. We are again seeing weakness from the pair as risk appetite has waned. Nevertheless, equity markets continue to show strength with government stimulus efforts continuing to provide optimism. However, I continue to maintain my bearish bias and will look for a break below 1.4800 for a short trade. 1.500 continues to limit upside risks which could make the path of least resistance to the downside.

Long GBP/JPY

Unknown Field-Author — Mon, 16 Nov 2009 14:31:38 GMT

Last week I stayed with my long EUR/GBP and was able to recoup earlier losses. I would close the position at break-even after subsequent weakness. The pair is again finding support at 0.8936-38.2% Fibo which leaves bullish potential as the level has held since 10/29. However, the pound has started to gain favor and I am leaning toward a long sterling position. A break below support would inspire a short trade.
Today, the GBP/JPY is garnering my attention as its current wedge formation foretells of a breakout. Therefore, giving my bullish bias I will take a long position with the 100-Day SMA at 151.52 as my initial target.

Short NZD/USD Pending

Unknown Field-Author — Fri, 13 Nov 2009 14:44:12 GMT

Last week I didn’t get sucked in on the weak Canadian employment figures and refrained from initiating a long USD/CAD position without a break above 1.0785-38.2% Fibo of 1.1722-1.0206. A drop below the 20-Day SMA changed my bias and triggered a short position, which I took profits at 1.0415 the 10/22 low. We are starting to see risk appetite ebb and flow as markets have been reluctant to push valuations higher with concerns over rising unemployment. However, the willingness of governments to maintain stimulus efforts continues to be a supporting factor. The one trade that I have the most comfort with is a NZD/USD short with a break below the 50-Day SMA at 0.7259. The level has held since 3/16 and a break below would be a strong bearish signal. My initial target would be the 11/2 low of 0.7080 with 0.7000 as the next barrier. We could see the pair ultimately fall to the 100-Day SMA at 0.6933.

GBP/USD Pending

Unknown Field-Author — Thu, 12 Nov 2009 14:38:00 GMT

Taking a short GBP/USD position last week wasn’t profitable for me as soaring risk appetite and rising interest rate expectations helped push the pair higher to test 1.6800. However, the BoE quarterly inflation report showed prices remain subdued and Governor King left open the door for more quantitative easing which has weighed heavily on the pair since. We have seen anti-dollar sentiment reach extreme levels which has led to Treasury Secretary Tim Geithner to start to talk up the buck. Equity markets have also come up against staunch resistance levels which could lead to a pull back today. Despite all the bearish signs, the pair is finding support from the rising trendline connecting the 10/13 and 11/3 lows with the 20-Day SMA at 1.6481 just below. Therefore, we could see bullish sentiment return with another test of 1.6800 a possibility. A break below support would lead me to a bearish bias with the 50-Day SMA at 1.6309 as my target.

CAD/JPY Pending

Unknown Field-Author — Wed, 11 Nov 2009 14:20:53 GMT

I wisely sat on the sidelines last week ahead of the FOMC meeting, as I was holding a bullish USD/JPY bias before the release. The dovish statements from policy makers would spark dollar weakness sinking the pair to ultimately test the lower Bollinger band at 89.31. This week I will focus on the CAD/JPY which is currently testing resistance at the 20-Day SMA at 85.76. A clean break above would trigger a long position with 88.23-10/20 as my target. However, a pull back in risk appetite could sink the pair and a break back below the 50-Day SMA at 85.03 would change my bias and look to target the 200-Day SMA at 82.94.

Short EUR/USD Pending

Unknown Field-Author — Tue, 10 Nov 2009 14:17:28 GMT

Taking profits last week on my short EURUSD trade was prudent as the pair reversed after failing to hold below the 50-Day SMA. The subsequent test of psychological resistance at 1.50 has seen the recent advance slowed which could open up the door for a bearish move. However, I would wait for a break back below the 20-Day SMA at 1.4882 to take a short position. The pledge by the G-20 to maintain stimulus efforts in order to ensure a recovery has fueled risk appetite, but the underlining concerns of rising unemployment and weak consumer consumption remain. Therefore, we could see a pullback in demand for risky assets justifying the bearish position.

Stay Long EUR/GBP

Unknown Field-Author — Mon, 09 Nov 2009 14:28:28 GMT

My long EUR/GBP trade last week wasn’t profitable as it failed to hold above the 50-Day SMA. The pair has found support ahead of my stop at 0.8850 and given current bullish Euro sentiment; I will stick with the trade and look to recoup my losses. The 38.2% Fibo level of the 0.9805-0.8400 decline at 0.8936 remains a solid support level which continues to limit downside risks. However, a break below the 200-Day SMA at 0.8863 would change my bias. Additionally, there are growing concerns that the single currency’s strength could threaten the scope of the region’s recovery which may become a weighing factor. Meanwhile, Euro continues to find support on the back of risk appetite and with U.S. equity markets starting a strong note, bullish sentiment may continue.

Long USD/CAD Pending

Unknown Field-Author — Fri, 06 Nov 2009 14:42:06 GMT

My long USD/CAD trade last week was triggered by a move above 1.0785-38.2% Fibo of 1.1722-1.0206 but subsequent weakness would stop out the position. The pair is looking to trade back above the resistance level as weak employment figures from Canada and the U.S. is weighing on risk appetite. The prospect of weak domestic spending at home and from its main trading partner should lower the growth expectations for the commodity driven economy. However, I am leery of broader dollar weakness if the dismal U.S. employment figures impacts the outlook for a U.S. recovery. Therefore, I will wait again for a clean break above the level with the 100-Day SMA at 1.0936 as my initial target, followed by 1.1125-8/17 high. If greenback weakness accelerates then I would change my bias and look to take a short position with a fall below the 20-Day SMA at 1.0537.

Short GBP/USD

Unknown Field-Author — Thu, 05 Nov 2009 14:47:30 GMT

Waiting for a pullback from the GBP/USD before taking a long position proved prudent as the pair would fall to the 50-Day SMA at 1.6271 before surging higher. After finding initial support on upbeat comments from the BoE following their rate decision, we have started to see weakness in the pair. The central bank warned of a sharp rise in inflation over the near-term which helped raise interest rate expectations. However, the MPC did add £25 billion to their asset purchase program which will increase the supply of sterling and could weigh on cable over the short-term. We could be seeing the pair settle into a range between 1.6250-1.6700 with the 50-Day SMA serving as a support level. We are also seeing a potential developing wedge which increases the possibility of a breakout. I favor further consolidation at this point and will employ appropriate strategies. Therefore, I will look to go short here with the 50-Day SMA at 1.6270 as my target.

USD/JPY Pending

Unknown Field-Author — Wed, 04 Nov 2009 14:20:24 GMT

Staying short the USDJPY last week was fruitful as the pair would hit my target of 89.25-10/15 low. The pair has started to erase its losses but is finding resistance at the 50-Day SMA at 90.96. A break above the level would be a bullish sign and lead to a long position with 92.31-10/27 high as my target. However, I will sit in the sidelines until the FOMC rate decision today as it has implications for long-term dollar sentiment.

Stay Short EUR/USD

Unknown Field-Author — Tue, 03 Nov 2009 14:10:43 GMT

My short EUR/USD trade was triggered last week with a break below the 20-Day SMA, today we saw my initial target of the 50-Day SMA hit at 1.4658. Therefore, I have taken some profits and moved my stop on the remaining positions to break even. There remains downside potential but with the FOMC and ECB policy meetings ahead there is significant uncertainty surrounding the pair’s direction. Therefore, I will remain cautious and may look to close out the position before the said event risk. However, a break below the 50-Day SMA does open the door for a test of the 100-Day SMA at Potential hints at tightening from either central bank could generate support for their currency, but neither is expected have a hawkish tone to their comments.

Long EUR/GBP

Unknown Field-Author — Mon, 02 Nov 2009 14:15:49 GMT

The EUR/GBP has bounced from the 38.2% Fibo level of the 0.9805-0.8400 decline at 0.8936. The pair has moved above the 50-Day SMA at 0.9011 which leaves potential to 0.9139-20-Day SMA. I am taking a long position as I expect the current rally to extend with speculation that the BoE will add to their asset purchase program. Additionally, we expect the ECB may look to start to lay the ground work for future tightening following their policy meeting.

Long USD/CAD Pending

Unknown Field-Author — Fri, 30 Oct 2009 13:44:51 GMT

My long USDCAD trade hit my target of the 50-Day SMA and 1.0707 where I took profits, the pair has since seen wild swings as a positive US GDP report created a brief bout of risk appetite. Today’s disappointing Canadian GDP report has the pair marching higher and threatening to break above resistance at 1.0787-38.2% Fibo of 1.1725-1.0209. I would wait for a clear break above the level to add fresh long positions with the 100-Day SMA at 1.0936 as my initial target, followed by 1.1125-8/17 high.

Stay Long GBP/USD

Unknown Field-Author — Thu, 29 Oct 2009 13:56:02 GMT

Last week I was wise to take profits on my long GBP/USD trade as the pair collapsed over 400 pips the following day on dismal GDP figures. The weak growth numbers raised the outlook for additional quantitative easing measures form the BoE. However, since then we have seen improvement in consumer spending and mortgage lending which may keep the MPC on hold. Although, credit conditions remain tight evidence is mounting that the central bank’s asset purchase program is having little impact on lending standards which may led policy makers to refrain from adding to it. The £50 billion added in August has been exhausted effectively ending the non-standard measures. My initial target on my long trade was 1.6738-9/11 high and if you are currently long I would look to take profits there. However, if you missed this morning’s post US GDP rally, then you may want to wait for a pullback for a better entry point.

Stay Short USDJPY

Unknown Field-Author — Wed, 28 Oct 2009 13:27:29 GMT

I entered a short USD/JPY position after the pair failed to hold above 91.75-38.2% Fibo of 97.77-88.00. We are seeing Yen support today on prevailing risk aversion, which may be a sign that the currency is regaining its status as a safe haven. My target from last week was 89.25-10/15 low. However, I may look to take profits at 90.26-the 20-Day SMA . I am leery of tomorrow’s U.S. GDP figures as robust growth could spark greenback support.

EUR/USD Pending

Unknown Field-Author — Tue, 27 Oct 2009 13:37:00 GMT

I continue to sit on the sidelines until I see confirmation that we have indeed seen a turn in sentiment regarding the EUR/USD and more broadly the greenback. I am waiting for a break below the 20-Day SMA at 1.4819 before entering a short position with the 50-Day SMA at 1.4614 as my initial target followed by 1.4500. The crowd remains heavily against the dollar and continued weakness in equity markets could lead to a rash of short covering. However, the longer-term theme of diversification away from the dollar will continue to be a supportive factor for the pair and may limit further bearish potential.

Long USD/CAD Pending

Unknown Field-Author — Fri, 23 Oct 2009 13:12:57 GMT

My long USD/CAD trade would hit my target of the 20-Day SMA at 1.0582 before giving back some of its gains. I took profit following the weakness and will wait for a break above the technical level to add fresh positions. A dismal UK GDP report was the first growth reading from the G-7 and could start to weigh on broader risk appetite if the outlook for the global economy dims. Therefore, we could see dollar support increase and the pair look to test the 50-Day SMA at 1.0722. The 38.2% Fibo of 1.0990- 1.0205 at 1.0506 is currently limiting upside potential and with equity markets looking to start on a positive note downside risks remain.

Stay Long GBP/USD

Unknown Field-Author — Thu, 22 Oct 2009 13:10:23 GMT

A break above the 100-Day SMA at 1.6353 triggered my long GBP/USD trade which is currently nearly 200 pips in the money. Recent weakness has me considering taking profit, but I will stick with the position and look for it to hit my target of 1.6744-9/11 high. However, I am moving my stop up to 1.6400 to guarantee profits.

Short USD/JPY Pending

Unknown Field-Author — Wed, 21 Oct 2009 13:16:41 GMT

I have been bullish the USD/JPY for the past few weeks and I still see a test 91.75-38.2% Fibo which is now seeing the 100-Day SMA converging. Traders currently long may want to stay in those positions to realize the gains. However, I see the potential for a retrace if dollar bearish sentiment re-emerges. Also, we are currently seeing retail traders extremely long the pair at 2.21 times shorts which is a contrarian signal. Therefore, I will look to go short with a failed test of the level and the 10/15 low of 89.25 as my initial target.

EUR/USD Pending

Unknown Field-Author — Tue, 20 Oct 2009 13:31:47 GMT

A strong earnings season has continued to provide Euro support but 1.500 continues to provide formidable resistance for the EUR/USD. I have been waiting for a retrace in the pair which hasn't happen but we may see it if the pair fails to break above the psychological level. However, there is prevailing broad based bearish dollar sentiment and it is beyond its correlation to risk. Markets are starting to take into consideration that there will be a major shift away from the greenback as government’s look to diversify their reserves. Therefore, I would wait for a break above 1.5000 for a long position. However, a retrace back below 1.4800 would lead me toward a bearish bias. For a pure risk trade traders may want to look to the EUR/JPY which is currently struggling to break above 136.00 and a move above there with corresponding price action in equity markets would validate a long position.

Long USD/CAD

Unknown Field-Author — Fri, 16 Oct 2009 14:40:32 GMT

My short USDCAD trade last week was very profitable as it hit my target of 1.0299 and would eventually fall to a low of 1.0205. We have seen a sharp retrace in the pair since then as risk appetite has started to wane and weak Canadian inflation data erased any hope that he BoC would begin tightening in the near-term. I am tempted to go long here with the 20-Day SMA at 1.0627 as my target. Resistance may also come at 1.0500.

Long GBP/USD Pending

Unknown Field-Author — Thu, 15 Oct 2009 19:31:37 GMT

Staying with my short GBP/USD didn't yield the profits that I was expecting as the pair reversed before hitting my target of the 200-DAy SMA. However, I prudently took some profit on the failed test of support at 1.5698 the 38.2% Fibo support line which the pair touched before changing direction. Bullish momentum today was slowed by the 50-Day SMA and with the 100-Day SMA right behind at 1.6351 a retrace could be in store. However, comments from BoE member Fisher has lower expectations for the central bank to add to their asset purchase program which may see sterling support continue. I would need to see a break above the resistance levels before entering a long position with 1.6744-9/11 high as my target.