Respect the Australian Dollar Downtrend
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Trade Implications – AUDUSD: Our purely sentiment-based Momentum2 strategy has done well selling into Aussie Dollar weakness versus the USD and Euro (short AUDUSD, long EURAUD). Past performance is not indicative of future results, but we believe the system may continue to do well.
The key caveat is that sharp declines and one-sided sentiment suggests the AUDUSD downtrend may soon see exhaustion. Yet our Senior Technical Strategist believes it wise to respect the Aussie downtrend until we see a meaningful reaction.
--- 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.