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[ATTACH=full]173531[/ATTACH]Last week the RBA held their cash rate at 4.35% and removed their slight hawkish bias from their statement. By Tuesday’s close, AUD/USD traded at a 9-day low and large speculators pushed net-short exposure to a record high. Yet a dovish FOMC meeting and strong employment report for Australia sparked a bout of short covering and allowed AUD/USD to briefly trade above the 200-day average. Although a stronger US dollar has now driven AUD/USD lower once more, and we’re eyeing its potential for a break below 65c to confirm a head and shoulders top pattern.However, with net-short exposure at a record high, there are risks of a sentiment extreme that could limit downside potential for AUD/USD. And when you consider its ability to remain above 63c over the past year, then it’ possible AUD/USD could remain above this level unless the weekly truly fall off the global or Australian economy.
[ATTACH=full]173531[/ATTACH]
Last week the RBA held their cash rate at 4.35% and removed their slight hawkish bias from their statement. By Tuesday’s close, AUD/USD traded at a 9-day low and large speculators pushed net-short exposure to a record high. Yet a dovish FOMC meeting and strong employment report for Australia sparked a bout of short covering and allowed AUD/USD to briefly trade above the 200-day average. Although a stronger US dollar has now driven AUD/USD lower once more, and we’re eyeing its potential for a break below 65c to confirm a head and shoulders top pattern.
However, with net-short exposure at a record high, there are risks of a sentiment extreme that could limit downside potential for AUD/USD. And when you consider its ability to remain above 63c over the past year, then it’ possible AUD/USD could remain above this level unless the weekly truly fall off the global or Australian economy.
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