FX Trading crowds are long the US Dollar (ticker: USDOLLAR) against all majors except the Australian Dollar. Those positions might work out well as the USD bounces off key support.
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Weekly Summary of Forex Trader Sentiment and Changes in Positioning
The majority of retail traders remain aggressively long the US Dollar (ticker: USDOLLAR) against all major currency pairs except the Australian Dollar. Such one-sided sentiment would normally leave us in favor of Greenback weakness, but low forex market volatility expectations suggest the USD is unlikely to break lows.
Instead we’re broadly in favor of buying any significant US Dollar declines as long as it continues to hold key lows versus the Euro and British Pound. Australian Dollar short positions likewise look attractive on the combination of a broader USD-bullish outlook and an AUDUSD break below important support.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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