Aussie Dollar, Yen, and Gold Prices Plummet - We Like Selling
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Weekly Summary of Forex Trader Sentiment and Changes in Positioning
Last week I wrote of material risks of an Australian Dollar bounce and Japanese Yen tumble—I couldn’t have been any more wrong on the AUDUSD, but that in itself is significant. Why?
The focus of my (painfully wrong) AUD forecast was the fact that large forex futures traders were their most net-short AUDUSD on record, and an inevitable short-covering could force an Aussie Dollar bounce. But that obviously didn’t happen, and the fact is that professional traders seem willing to continue to buy the US Dollar across the board—that’s significant.
It signals that the US Dollar could go far higher before an important correction. The fact that our retail forex trader sample shows crowds are selling into Dollar gains serves as contrarian signal that the currency may continue higher.
Read full currency pair-by-currency pair rundowns in the links above, and follow future updates on retail sentiment and our trading strategies via my e-mail distribution list.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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