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AUDUSD– Retail FX traders are now net-short the Australian Dollar versus the US Dollar, and a contrarian view of ‘crowd’ sentiment leaves us in favor of buying into further AUD/USD gains. This admittedly stands in contrast to what we said a short time ago—traders were previously net-long and we called for weakness. Indeed it has been difficult to establish a long-standing trading bias given choppy AUD price action.
The US Dollar’s recent sell-off against the Euro, Japanese Yen, and other major currencies nonetheless suggests there is room for further USD weakness and AUD/USD strength.
See next currency section: S&P - US S&P 500 Remains a Buy until this Changes
--- Written by David Rodriguez, Senior Strategist for DailyFX.com
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