Aussie and British Pound Could See Further Strength Versus US Dollar
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Weekly Summary of Forex Trader Sentiment and Changes in Positioning
Retail forex traders have significantly scaled back long positions in the AUDUSD, and the important shift in sentiment warns that we may continue higher. British Pound sentiment has seen the start of a similar shift, and our sentiment-based strategies have bought into the AUD and GBP correction.
In the meantime we’re waiting for a bigger break in the Euro and Gold prices to take a stronger stance on the Greenback. A noteworthy drop in forex volatility suggests we may see further consolidation through near-term trading, but that does not rule out sharp intraday price swings.
Our breakout-based and trend-following strategies have given back some of their February gains on sideways price action, but we’re optimistic that the next major moves will provide attractive trading opportunities.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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