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Apr 02 - 02:55 AM

AUD/USD - RPT-BUZZ-View Of The Week-Challenge Of The Season Confronts Record AUD/USD Shorts

By Justin Mcqueen  —  Apr 02 - 01:35 AM

Repeats with no changes

The Australian dollar has been among the worst performing G10 currencies so far in 2024, falling some 4%.
Throughout this time, speculators have continued to pile into AUD shorts, now at a record high, according to the CFTC positioning data.

However, the record amount of net AUD shorts will now have to contend with unfavourable seasonal conditions.
Now of course, seasonality is not the sole determinant behind the direction of where a currency pair may be heading, nor should it be used in isolation.
Instead, seasonality can be a complementary tool for traders.

Since 2000, April has often been the best month for AUD/USD, averaging a gain of 1.05%.
This also coincides with U.S. stocks typically putting in a strong showing.
By contrast, April is often the worst month for the dollar.

Given the aforementioned record levels of net AUD shorts, this makes the seasonal trends slightly more interesting.
One could argue that a lot of the negative news is in the price for the AUD.

This, however, is contingent on whether the yuan weakens further.
That said, should U.S. data surprise on the downside, most notably the March CPI release, this would likely be best expressed with AUD/USD higher.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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