Australian Dollar Might Actually Outperform After Rout
AUDUSD – Retail forex trading crowds remain aggressively long the Australian Dollar versus the US Dollar as the pair has fallen substantially off of recent peaks. But a recent shift towards selling suggests we could see further AUDUSD upside through near-term trading.
Trade Implications – AUDUSD: The US Dollar remains in obvious uptrend across the board, but substantially one-sided futures traders forex positions in AUDUSD futures suggests the Aussie Dollar may be a relative outperformer. That coincides with retail sentiment, which has become far less one-sided through last week. Our Momentum2/”Tidal Shift” strategy is mostly long USD against other pairs, but it recently sold the Greenback versus the Aussie Dollar (long AUDUSD) from $0.9286. I wouldn’t ignore the far-more-substantial shift towards USD gains, but an AUDUSD long seems reasonable through short-term trading.
--- 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.