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AUDUSD: Retail trader data shows 40.0% of traders are net-long with the ratio of traders short to long at 1.5 to 1. In fact, traders have remained net-short since Jun 04 when AUDUSD traded near 0.74411; price has moved 2.0% higher since then. The number of traders net-long is 8.6% higher than yesterday and 23.5% higher from last week, while the number of traders net-short is 2.7% higher than yesterday and 13.4% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUDUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn we may be at the beginning of a trend change in the AUDUSD. We would need to see a larger build in ‘crowd’ buying to confirm that the Australian Dollar has indeed turned lower.
See next article in this week’s report: S&P 500 - S&P Remains a Buy, though Risk of Reversal has Grown
