AUD/USD Bias May Shift to Bearish Before RBA on Tuesday
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AUDUSD: Retail trader data shows 47.9% of traders are net-long with the ratio of traders short to long at 1.09 to 1. In fact, traders have remained net-short since Jun 04 when AUDUSD traded near 0.74145; price has moved 5.8% higher since then. The number of traders net-long is 1.2% higher than yesterday and 35.3% higher from last week, while the number of traders net-short is 3.2% lower than yesterday and 28.2% 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 that the current AUDUSD price trend may soon reverse lower despite the fact traders remain net-short.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
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