Aussie: Three reasons to doubt our US dollar rally view

The Aussie’s price action provides us with three reasons why we may be wrong about another rally in the US dollar here:

  1. The move from the low, in the red box in the daily chart has an impulsive (trend) symmetry, suggesting higher prices ahead;

  2. Aussie 2-year yield spread is move sharply higher from recent low levels (spread chart below); and

  3. Aussie net short position suggests extreme bearishness (a contra-inidcator) as you can see in the third chart below…

111618 aud daily.png
111618 aussie yield spread.png
111618 aud pos.png