[B]My picks:[/B] Stay Short AUD/CAD, Sell AUD/JPY
[B]Expertise:[/B] Fundamentals Combined With Technicals
[B]Average Time Frame of Trades:[/B] 1 Day - 1 Week
I’m sticking with my view from April 10, when I was looking to sell AUD/CAD on a daily close below 0.8853. I am staying short the pair with a stop above 0.8940, with enough space allowed for any widening of the spread during low-liquidity hours. Potential targets include the 200 SMA at 0.8559 and the 50% fib of 0.7726-0.8939 at 0.8330.
I’m also looking to sell AUD/JPY, as risk appetite looks to be taking a turn for the worst amidst uncertainty about the outcome of the government’s stress tests on US financial institutions. These results won’t be released until May 4, so until then, rumors may swirl and weigh heavily on risky assets. AUD/JPY is currently testing rising trendline support and the March highs near 69.30/50, and I think it may be worth selling a break of the level. Stops would ideally be placed above the 200 SMA at 72.69, though traders should utilize their preferred risk/reward ratios. Potential targets include the 50% fib of 55.56-73.54 at 64.57 and the 100 SMA at 63.35. If you are of the view that risk aversion could make a strong comeback in coming months, it may be worthwhile to look at this as a longer-term trading opportunity and wait to see how a test of the record low of 55.07 fares.