Australian Dollar Might Bounce, but Crowds Too Willing to Buy

| 6 juni, 2013 | 0 kommentarer

ssi_aud-usd_body_Picture_17.png, Australian Dollar Might Bounce, but Crowds Too Willing to Buy

AUDUSD – We’ve made no secret of our preference for sharp AustralianDollar declinessince it broke $1.02, and indeed retail forex sentiment leaves us plainly in favor of continued weakness.

Trade Implications – AUDUSD: Hindsight is obviously 20/20, but the strongest argument in favor of Australian Dollar weakness probably came on the sharp breakdown in AUDUSD yield differentials and exceedingly one-sided retail FX trader sentiment.

Of course, the pair’s already fallen a massive 10+ percent (nearly 1100 pips!) from its April peak. Can it continue lower? Of course, and I think it will. Will it match its freefall of the past two months? Almost definitely not. It currently trades at a massive confluence of support, and the risk of a short-term bounce is very high.

That said, I still think it’s better to sell into historic declines rather than try and catch falling knives. I’ll look to sell any important bounces.

Written by David Rodriguez, Quantitative Strategist for DailyFX.com

ssi_aud-usd_body_1a_3.png, Australian Dollar Might Bounce, but Crowds Too Willing to Buy

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Kategori: Analys från DailyFX

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