Trade FOREX with FXCM

  • Award-Winning Platform
  • 24/7 Customer Support
  • Trade Directly on Charts
  • Free $50K Practice Account

Resources

FOREX ANALYSIS: Australian Dollar Likely Topped

By , Quantitative Strategist
15 November 2012 15:49 GMT
ssi_gbp-jpy_body_Picture_1.png, FOREX ANALYSIS: Australian Dollar Likely Topped

AUDUSD – Retail forex traders are now net-long the Australian Dollar versus the US Dollar (ticker: USDOLLAR) for the first time in a month, and the sharp shift in retail sentiment warns that the AUDUSD may have set a significant top through recent trading.

A sharp Australian Dollar sell-off from the November high was the first signal that the AUD may have set a significant peak, and we’ve likewise seen the number of retail traders long AUDUSD surge 32 percent since the peak. A similar 28 percent tumble in the number of traders short now leaves crowds at a net-long AUD position for the first time since October.

We use our proprietary Speculative Sentiment Index data as a contrarian indicator to price action; if the majority of traders are buying, we prefer to sell. Indeed, our retail sentiment-based FX trading strategies took a AUDUSD short from $1.0378.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

New to FX markets? Learn more in our video trading guide.

Contact David via

Twitter at http://www.twitter.com/DRodriguezFX

Facebook at http://www.Facebook.com/DRodriguezFX

provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from

15 November 2012 15:49 GMT