AUD/USD put options with 1-month to maturity are being bid significantly higher than similar calls and it is apparent to me that spot traders are increasing their hedging against a possible carry trade unwind. That said, I will be looking for opportunities to sell-short AUD/USD for 100 pips in profit potential.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daq6ThPj

The USDCAD may be nearing a short term top.  The rally is in 5 waves and the last leg up may be a thrust from a triangle.  Triangles occur in 4th waves, therefore the rally from the triangle is a 5th wave.  A setback next week would present another bullish opportunity.  With this in mind, I am exiting most of the USDCAD long position from Monday.  There may also be an opportunity to short NZDUSD next week on a bounce...resistance is 7240.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daqEtsM7

The US dollar has staged significant breakouts across the majors, and if you are not already long the currency, it may be worthwhile to look for opportunities to do so. For example, NZDUSD broke below its 100 SMA and a falling trendline connecting the Oct. 21 and Nov. 16 highs, the Jan. 8 lows, and the Jan. 21 highs. In an effort to get the best price possible, I’m looking to sell NZDUSD on another test of that trendline, which coincides with the 38.2% fib of 0.7444-0.7093 at 0.7200/25. Potential targets include the Dec. 23 low of 0.6971 (0.7000) and the 200 SMA at 0.6794 (0.6800). I will likely base my stop on a close above the 100 SMA at 0.7251.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daqIo4vC

Two days ago I highlighted a solid sell opportunity in the NZD/USD. The recent breakdown takes it below the confluence of the 20-day, 50-day, and 100-day Simple Moving Averages as well as the 61.8% Fibonacci retracement of the 0.6980-0.7440 advance at 0.7160. Stay short the currency pair but tighten risk to breakeven.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daqKYhTm

The past 72 hours have been incredible for the FX market. A crack in risk appetite has exposed the insecurities behind the otherwise steady build in speculative positioning over the past 10 months or so. I believe this is a long overdue shift that will develop into a prominent wave of profit taking and position unwinding. However, just like the initial advance that brought us to recent highs; rising bear wave will not be linear. We are already seeing something of a pause today from the aggressive selling of the past week. Looking ahead to next week, we have plenty of big-ticket event risk (US and UK GDP among the top billing); so there could very well be a temporary stay on trends until the market can discern this data’s impact on fundamental valuations. However, I will keep on my toes because speculation once it starts moving is difficult to stop.

With an outlook for a deeper tumble in sentiment interspersed by temporary breaks, I am looking for positions on both side of the risk scale. To successfully navigate both sides, I will have to define my time frame and objectives well. Keeping with the longer-term bearish scenario, I will hold onto my NZDUSD short. I have been in this position since 0.74 and have already taken half off. A second objective could end up around 0.6950; but I true trend development could call for something much lower. Therefore, I will keep my target open for now and just keep a wide trail on my stop. A position that has less of a risk-bias to it is my AUDCAD short. We recently bounced back up to my entry level at the descending trendline from that began with the 11/9 swing high and coincides with the 50-day SMA. A clear break above this level will negate my position; but a break below 0.9450 will encourage me to build the position - have have already taken half profits twice in this past week’s swings and brought it back to full size on tests of the range high. Finally, I am taking some counter-trend risk with a USDCAD short. I jumped in this morning at 1.0580 and set a stop 60 points higher. My first target is set around 100 points below entry and the second objective will remain open for now.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daqQ4wHX

A USD/CAD breakout triggered a long position and a move above the 20-DAy SMA at 1.0386 led me to add to my position generating nearly 200 pips in profit. Today’s test of the 100-Day SMA at 1.0572 has me taking some profits as I wait to see if the technical indicator is cleared. Trend line resistance near 1.0600 could also prove formidable and lead to a reversal. However, a break above would expose considerable upside and lead me to add to my positions. Failure at the trendline would change my bias and have me look to take a short position with the 20-Day SMA at 1.0384 as my target.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daqUElsM

Although we were stopped for a loss earlier in the week, we still remain highly bullish at current levels, with the market trading at what appears to be a discount given longer-term technical studies. Weekly studies are oversold and we expect to see a major bounce over the near-term, which ultimately will set up a major base and open some significant upside over the coming weeks and months. While a sell-off in the USD on Friday does not favor a higher cross rate, we do not expect the USD selling to persist and would use any cross weakness resulting from broad based USD selling as an excellent opportunity to re-establish a long position.  STRATEGY: BUY @1.5510 FOR AN OPEN OBJECTIVE, STOP @1.5360. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE ON FRIDAY. 3X LEVERAGED.

Read more: Forex Analysis | Currency Trading Picks http://www.dailyfx.com/analyst_picks/#ixzz0daqWDVOf