AUDUSD – Forex trading crowds have aggressively bought into Australian Dollar weakness versus the US Dollar, and our contrarian trading systems have sold AUDUSD in anticipation of further declines.
Trade Implications – AUDUSD: It remains a frustrating run of performance for our purely sentiment-driven Momentum2 strategy, as it has flipped direction on AUDUSD four times in the past three weeks. It is subsequently difficult to get excited about its current short position from $1.0244, but it’s clear that trading crowds have bought aggressively into recent weakness.
The month of May has thus far proven kind to the US Dollar (ticker: USDOLLAR), and it seems relevant to wonder whether this is the start of a larger AUDUSD breakdown. Our Senior Technical Strategist believes that AUD-short positions remain attractive on the potential for said continuation.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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