AUDUSD – You can’t claim victories without admitting defeat—I couldn’t have been any more wrong as I called for a significant Australian Dollar bounce. Watch out for further risk of AUD losses.
Trade Implications – AUDUSD: The fact that the Australian Dollar has essentially crashed despite extremely one-sided retail and futures traders forex positions is significant. Clearly traders are not done selling AUD, and the risk of further declines is significant.
I won’t ignore the risk that a rush out of AUDUSD-short positions could force a material AUD rally. But that’s what makes the post-FOMC sell-off that much more important. I don’t think it’s time to get in front of a runaway freight train, and our systems are duly short the Aussie Dollar.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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