Australian Dollar Outlook Turning Bullish Again
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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
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