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Australian Dollar at Clear Risk of Continued Breakdown

Australian Dollar at Clear Risk of Continued Breakdown

David Rodriguez, Head of Product

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AUDUSD Retail FX traders remain heavily long the Australian Dollar versus the US Dollar, and a contrarian view of crowd sentiment gives reason to believe the AUDUSD fall further.

Trade Implications – AUDUSD:Our retail FX data shows that there are an impressive 2.8 long positions for every position short the AUDUSD—coming close to extremes not seen since May as the AU$ tested key support at $0.9200. In that instance it set an important short-term low before breaking down in September. And though heavily one-sided positions often occur at major market tops/bottoms, the actual extreme is only clear in hindsight. Until we see a sustained shift in sentiment we’ll continue call for AUDUSD weakness.

See next currency section: NZDUSD - New Zealand Dollar Targets Fresh Lows

--- 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.

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