Let's check the date for interest rate change in US dollar. Usually prices go oppositely until there is a change in the interest rate. I certainly do take a short position when there is a bear trend but I will NOT take a short position when it is in a bull trend . Having said, I will more focus on long positions as I feel safer moving in the same direction as market maker than moving in the direction of commercial traders whose trading motivation is solely for hedging (than information motivated). I haven't checked the AUDUSD chart yet, but last time when I checked it was still having bullish sentiment
Consider a short position in EURUSD than AUDUSD- speculators overall position in November tells that it anticipate a bear trend in the near future
Actually what it means is that commercial traders are taking short positions . You anticipation might turn out to be right. But the fundamental information about AUS economy is not too bad so I think that it won't depreciate much. They have been keeping both unemployment and inflaction constant. Speculators will enter on the other side by taking long positions and prevent the prices getting destablised by commercial traders - which is what I am keen to follow for AUSUSD next week. Just be careful when you take a short position, price might become too volatile. You take a short position, I will wait for you on the bottom of a price - buy low and sell high The source is from U.S. Commodity futures trading commission
so this is why Xela was so confident after all...using futures contract price/volume to predict future price. It's relatively easier when there is a sign of future direction of a price especially, when the spot price is excessively deviated from futures contract price (when there is no change in fundamental information) - the law of one price principle, I get it now !