We have exited our short early as Aussie broke the down trendline in mid February, retraced, and shot up in two weeks.
Improved risk sentiment and spillover effects from the rise in commodities has seen Aussie back in demand, especially after RBA decided to hold its interest rate. The better than expected GDP report a day after that was the cherry on top that lured speculators and investors into the commodity currency.
Looking at the futures market, obviously risk is on, with equities and commodities showing gains, and bond and metals retreats.
The Aussie futures for June delivery showing net long, with speculators increased their longs the most after they turned bullish Feb 16th.
In the short-term we believe Aussie bulls are reaching the point of exhaustion and correction is due soon. Any bad news could trigger a sell off and a long term bearish trend strategy could be back in play.
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