This is the equation which has encouraged me to bet against the rock-solid bull trend in the AUD/USD. I’ve read two reports in the last week or so of real-money accounts selling the AUD/USD in decent amounts. Most of the buying is coming from leveraged speculative accounts who are playing the carry trade. I’m not sure what could happen to turn the AUD/USD around but I do know that the market is long and if a fall happens, it will be short and sharp.
Other major currencies like the EUR and the GBP have fallen significantly against the USD in recent months but the AUD has proved to be seemingly immune. Now with USD/JPY also starting to catch a bid-tone, is it just possible that the halo might slip from the AUD as well and that it gives back some of its’ over-extended gains? I’m betting on a turn and as with all such counter-trend trades, there’s a definite level of risk involved but the potential reward makes it worthwhile in my humble opinion.
