Australian Dollar Strength Likely as Crowd Sentiment Shifts
AUDUSD – Retail traders have aggressively scaled back on AUDUSD-short positions, and a contrarian view of forex sentiment favors further strength.
Trade Implications – AUDUSD: Our sentiment-based Momentum2 system has recently bought the Australian Dollar against the US Dollar on the sharp shift in retail sentiment, and our technical forecast for the AUDUSD leaves us in favor of further short-term strength. Long interest is down a remarkable 48 percent in the past week, and the sharp swing gives us contrarian signal that the Aussie may continue higher.
--- 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.