Respect the Australian Dollar Downtrend

DailyFX

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Australian dollarRetail forex traders remain extremely long the Australian Dollar against its US namesake, and a contrarian view of crowd sentiment favors continued AUDUSD weakness.

Trade Implications – AUDUSD: Our purely sentiment-based Momentum2 strategy has done well selling into Aussie Dollar weakness versus the USD and Euro (short AUDUSD, long EURAUD). Past performance is not indicative of future results, but we believe the system may continue to do well.

The key caveat is that sharp declines and one-sided sentiment suggests the AUDUSD downtrend may soon see exhaustion. Yet our Senior Technical Strategist believes it wise to respect the Aussie downtrend until we see a meaningful reaction.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

ssi_aud-usd_body_Picture_1.png, Respect the Australian Dollar Downtrend

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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