Forex Analysis: Looking to Sell AUDUSD Bounce
In today's SSI report, I highlight the fact that retail trading crowds are now long the Australian Dollar against the US Dollar for the first time in a month. All the while, the majority of retail traders are their least net-long USDJPY in quite some time.
The combination is enough for me to continue watching for USDJPY strength and AUDUSD weakness. Yet volatility remains too low to chase the USD higher here. Instead I'd like to sell an AUDUSD bounce and buy into USDJPY declines.
I'm now in a very small USDJPY-long position as I took partial profits on the run higher, but I'd like to buy on any dips towards resistance-turned-support at ¥80.65.
For the AUDUSD I'll take much the same approach--I'll look to sell the Aussie if it hits support-turned-resistance near $1.0360.
Stops on both the Aussie and USDJPY positions will be placed at the subsequent swing high or low.
I'll keep my thoughts posted via the forex real time news feed.
--- 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 to David’s e-mail distribution list via this link.
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