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Australian Dollar Shows Early Signs of Reversal

Australian Dollar Shows Early Signs of Reversal

David Rodriguez, Head of Product

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AUDUSD A sharp shift in retail FX trader sentiment suggests the Australian Dollar may have set a short-term low versus the US Dollar.

Trade Implications – AUDUSD:Our retail FX trader data shows the majority of traders have remained long AUDUSD with brief exception since it traded below $0.9400 in June, 2014, and a contrarian view of crowd sentiment has called for continued weakness. Yet positions have moderated considerably since last week as the pair trades higher; the ratio of long-to-short positions went from 3:1 last week to 1.8:1 at time of writing.

Ideally we would see positioning turn net-short to call for a sustained Aussie Dollar reversal, but an important shift suggests this could be the start of a larger AUDUSD correction higher.

See next currency section: NZDUSD - New Zealand Dollar May test Fresh Lows versus US Dollar

--- 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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