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Forex pairs in this Article » AUD/USD
ssi_aud-usd_body_Picture_2.png, Respect the Australian Dollar DowntrendReceive the Weekly Speculative Sentiment Index report via PDF via David’s e-mail distribution list.

Australian dollar – Retail 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.

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