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Australian Dollar Outlook Turning Bullish Again

Australian Dollar Outlook Turning Bullish Again

Christopher Vecchio, CFA, Senior Strategist

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

AUDUSD: Retail trader data shows 31.4% of traders are net-long with the ratio of traders short to long at 2.19 to 1. In fact, traders have remained net-short since Jun 04 when AUDUSD traded near 0.74542; price has moved 7.3% higher since then. The percentage of traders net-long is now its lowest since Sep 11 when AUDUSD traded near 0.80307. The number of traders net-long is 13.4% lower than yesterday and 7.8% lower from last week, while the number of traders net-short is 11.3% higher than yesterday and 5.7% higher 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. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger AUDUSD-bullish contrarian trading bias.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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