Is this the Australian Dollar Turnaround?
Trade Implications – AUDUSD: We’ve called for a major turn in the Australian Dollar more times than we care to admit, but the most recent turnaround seems as likely as ever to produce a lasting AUDUSD bounce. Our Retail FX sentiment indicator shows that the vast majority of traders remain long (2.2 long orders to 1 short). Yet that’s a substantive reversal from just 7 days ago when the same ratio stood at 4.4:1.
Is this the major turn? Sentiment extremes are only clear in hindsight, but the fact that our SSI-based Momentum2 system has gone long from $0.8987 adds further weight to calls for a bounce.
--- 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.