Australian Dollar Shows Early Signs of Reversal
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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.