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Forex Analysis: Crowds Point to Major AUD/USD Top, USD/JPY Bottom

By , Quantitative Strategist
15 November 2012 15:49 GMT

Retail forex trading crowds have sold aggressively into US Dollar (ticker: USDOLLAR) strength against the Australian Dollar and Japanese Yen—producing contrarian signal to favor gains.

View individual currency sections:

EURUSD - Euro Forecast Clouded

GBPUSD - British Pound May Fall Further

USDJPY - Japanese Yen Forecast to Fall

USDCHF - Swiss Franc Eyes Gains

USDCAD - Canadian Dollar Forecast to Depreciate

AUDUSD - Australian Dollar Likely Topped

ssi_table_story_body_Picture_8.png, Forex Analysis: Crowds Point to Major AUD/USD Top, USD/JPY Bottom

The significant shift in trader sentiment has been enough to force our sentiment-based forex trading strategies to go long the US Dollar and short the Japanese Yen across various counterparts.

Those USD-long positions line up well with our bullish forecasts for the Dow Jones FXCM Dollar Index, and indeed we believe Dollar longs remain attractive amidst the clear retail sentiment shift.

ssi_table_story_body_Picture_7.png, Forex Analysis: Crowds Point to Major AUD/USD Top, USD/JPY Bottom

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

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15 November 2012 15:49 GMT