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CFTC: AUD Spot Rally Built on Short-Covering

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  • Friday's CFTC release showed the recent rally in AUD continues to be driven by short-covering, with the data showing the 0.6750 to 0.6900 came alongside the net buying of 29k contracts, or 17.3% of open interest. This leaves the net short at 6.4% of open interest.
  • It seems likely that the latest leg higher to 0.6940 this morning has further benefited from a trimming of these shorts - and a flip to net long would be only the second since 2021 - and may signal that medium-term momentum needs to pick up an extra tailwind beyond short-covering to sustain the rally.
  • 0.6984, a Fibonacci projection, marks the next meaningful resistance, and if this mark caps the near-term rally, support at the 20- and 50-day EMAs provide the next downside targets for a corrective pullback, at 0.6789 and 0.6728 respectively.
  • Meanwhile, markets modestly deepened shorts in CAD and CHF, while building the net long EUR, GBP and JPY position. Full data here:
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  • Friday's CFTC release showed the recent rally in AUD continues to be driven by short-covering, with the data showing the 0.6750 to 0.6900 came alongside the net buying of 29k contracts, or 17.3% of open interest. This leaves the net short at 6.4% of open interest.
  • It seems likely that the latest leg higher to 0.6940 this morning has further benefited from a trimming of these shorts - and a flip to net long would be only the second since 2021 - and may signal that medium-term momentum needs to pick up an extra tailwind beyond short-covering to sustain the rally.
  • 0.6984, a Fibonacci projection, marks the next meaningful resistance, and if this mark caps the near-term rally, support at the 20- and 50-day EMAs provide the next downside targets for a corrective pullback, at 0.6789 and 0.6728 respectively.
  • Meanwhile, markets modestly deepened shorts in CAD and CHF, while building the net long EUR, GBP and JPY position. Full data here: