Via Greg McKenna of GlobalFX comes news that the number of short positions on the Australian dollar is at record levels.
Data from the US Commodity Futures Trading Commission released on Friday showed there were almost 71,000 short position contracts on the Aussie last week.
Citi reports the value of the short positions is now around to $6.5 billion.
The appetite for short positions on the Aussie has been around for some time. Last month Michael Trudel, managing director at BlackRock, which controls around $3.9 trillion in assets, told the Wall St Journal that there was a “long line” to get into short positions on the Aussie as falling commodity prices, China’s slower growth and hopes of a US recovery continue to tug on the dollar’s value.
McKenna sent us this chart which shows the switch to short positions in recent weeks in line with the fall in the currency’s value.
He says: “This makes the market vulnerable, very vulnerable to a reversal but I would suggest 0.9330/50 needs to break before wholesale liquidation results.”
A short time ago the Aussie was trading at US$0.9211.
There’s more at GlobalFX.
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