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Aussie and British Pound Could See Further Strength Versus US Dollar

By , Quantitative Strategist
14 March 2013 14:30 GMT

Our sentiment-based strategies have bought the Australian Dollar and British Pound against the US Dollar (ticker: USDOLLAR) as retail forex crowds have done the opposite.

View individual currency sections:

EURUSD - Clear Euro Direction May Wait Break of $1.2875

GBPUSD - Sentiment-Based Strategies Buy GBPUSD on Risk of Bounce

USDJPY - Japanese Yen Sentiment Warns of Reversal - But When?

XAUUSD - Gold Forecast Cautiously Optimistic, but Sentiment Poses Clear Danger

SPX500 - SPX500 Forecast to Rally Further as Retail Traders Sell

AUDUSD - Australian Dollar Strength Likely as Crowd Sentiment Shifts

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

ssi_table_story_body_Picture_12.png, Aussie and British Pound Could See Further Strength Versus US Dollar

Retail forex traders have significantly scaled back long positions in the AUDUSD, and the important shift in sentiment warns that we may continue higher. British Pound sentiment has seen the start of a similar shift, and our sentiment-based strategies have bought into the AUD and GBP correction.

In the meantime we’re waiting for a bigger break in the Euro and Gold prices to take a stronger stance on the Greenback. A noteworthy drop in forex volatility suggests we may see further consolidation through near-term trading, but that does not rule out sharp intraday price swings.

Our breakout-based and trend-following strategies have given back some of their February gains on sideways price action, but we’re optimistic that the next major moves will provide attractive trading opportunities.

Download eight years’ worth of SSI data via this link.

ssi_table_story_body_1a.png, Aussie and British Pound Could See Further Strength Versus US Dollar

View how to automate the high-volatility Breakout2 Trading System via our previous article and webinar recording.

Auto trade the trend reversal-trading Momentum2system via our previous article and webinar recording.

Trade with strong trends via our Momentum1 Trading System and view an archived webinar

Use our counter-trend Range2 Trading system and view an archived webinar guide on automation

ssi_table_story_body_Picture_13.png, Aussie and British Pound Could See Further Strength Versus US Dollar

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

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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14 March 2013 14:30 GMT