Forex trading crowds remain heavily long the US (ticker: USDOLLAR) against the Euro and British Pound, but a shift in Australian Dollar positioning warns of reversal.
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USDCHF - Swiss Franc Outlook Favors Gains
Our sentiment-based forex trading strategies have consistently sold the US Dollar and Japanese Yen against the Euro, British Pound, Swiss Franc, Canadian Dollar, and Australian Dollar through recent trading. Yet we’ve most recently seen those same systems take profits on USD short positions, and our “Tidal Shift” strategy has actually gone short AUDUSD from $1.0546.
It is perhaps too early to call for a larger US Dollar recovery, but important shifts in retail trading crowd positions provide early sign that the Greenback may have reversed versus the Australian Dollar and other commodity currencies.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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