20 Jul 2015
AUD/USD: Absorbs bids through 0.7350, fresh trend lows
FXStreet (Bali) - AUD/USD has opened up further downside potential, now en-route to 0.73, after an absorption of bids through 0.7350, with both, broad-based USD strength and a collapse in Gold creating the perfect bearish storm.
CoT report shows smart money committed on AUD short side
We also saw a perfect bearish scenario in the futures traders' weekly report, with the bias likely to be maintained until a potential area of profit-taking, which judging by the higher-time-frame charts, might not occur until at least 0.73/7270.
Open interest was up last week, large specs increased shorts, dealer longs rose too, while asset managers increased shorts. The only downside is that dealer longs are reaching very extreme levels, near 80% vs open interest. So it suggests we are on a bearish committed market but downside start to look overstretched, implying a relief rally may come fast and furious.
AUD/USD technicals: Bears in total control ST
All time-frames seem to be aligned to continue selling the Aussie, with intraday traders likely to be camped on shallow bounces (0.7350 up to 0.7390 potential areas of value to re-engage short). In order for buyers to re-take control of the market short term, they will need to re-claim 0.74/7410 on an hourly basis, at the bare minimum. Even if that's the case, from a daily time-frame, bears enjoy now more than 2 cents of leeway before the bearish structure may be questioned.
CoT report shows smart money committed on AUD short side
We also saw a perfect bearish scenario in the futures traders' weekly report, with the bias likely to be maintained until a potential area of profit-taking, which judging by the higher-time-frame charts, might not occur until at least 0.73/7270.
Open interest was up last week, large specs increased shorts, dealer longs rose too, while asset managers increased shorts. The only downside is that dealer longs are reaching very extreme levels, near 80% vs open interest. So it suggests we are on a bearish committed market but downside start to look overstretched, implying a relief rally may come fast and furious.
AUD/USD technicals: Bears in total control ST
All time-frames seem to be aligned to continue selling the Aussie, with intraday traders likely to be camped on shallow bounces (0.7350 up to 0.7390 potential areas of value to re-engage short). In order for buyers to re-take control of the market short term, they will need to re-claim 0.74/7410 on an hourly basis, at the bare minimum. Even if that's the case, from a daily time-frame, bears enjoy now more than 2 cents of leeway before the bearish structure may be questioned.