A substantial shift in US Dollar (ticker: USDOLLAR) positioning versus the Australian Dollar and Japanese Yen suggests that the Greenback may continue higher.
View individual currency sections:
EURUSD - Euro Forecast to Rally as Crowds Sell
GBPUSD - British Pound Sentiment Warns of Further Weakness
USDJPY - Japanese Yen Forecast to Fall Further
USDCHF - Swiss Franc Outlook Remains Bullish
USDCAD - Canadian Dollar Trading Outlook Unclear
AUDUSD - Australian Dollar Forecast to Fall Further
In fact, retail trading crowds have now turned net-short the USDJPY for only the third time this year as the pair presses to fresh multi-year highs. A surge in AUDUSD long interest leaves retail traders net-long for the first time since mid-November and similarly favors US Dollar strength.
It is nonetheless critical to note that crowds remain heavily long the USD against the Euro and Swiss Franc—giving us mixed signals for the US currency. Yet recent shifts may be the start of much larger corrections, and we’ll keep an especially close eye on whether the USD trades higher to start the New Year.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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