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Reasons Why I Remain Short Australian Dollar

Reasons Why I Remain Short Australian Dollar

David Rodriguez, Head of Product

I went short Australian Dollar two weeks ago, added to the position last week, but I'm looking to take partial profits right now.

As I detailed on the Real Time News Feed last week, my initial entry was at the $1.0487 with a stop above $1.0550. I remain in that position as I look for the pair to test significant support at $1.0180.

Since then, I added to the position after Fed Chairman Ben Bernanke's address at Jackson Hole pushed the Dollar lower. I sold from $1.0330 with a stop above $1.0400.

Ultimately I'm paying a lot of attention to the fact that recent CFTC Commitment of Traders data shows Non-Commercial futures traders at their most net-long AUDUSD since the pair hit record-highs in 2011.

More recent CFTC data shows that AUDUSD longs have pulled back, and I fully expect this to be the start of a larger move lower.

That said, I will take partial profits on the position, closing a third of the open short and trailing my stop to the psychologically significant $1.0400 mark.

I'll close part of the position at current market price of $1.0225 and put a sell-limit order at today's high of $1.0285.

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--- Written by David Rodriguez, Quantitative Strategist for

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.