According to Greg Gibbs, Analyst at Amplifying Global FX Capital, one of the biggest impediments to potential downside in the AUD and NZD appears to be excessive short market positions.
Key Quotes
“The CFTC data on speculator positions in the currency futures market shows the market is around record net shorts in the AUD, and at a significant new peak in net shorts for the NZD.”
“The Citibank FX Positioning Alert Indicators (PAIN), which estimate the positions of currency managers from their reported returns, also suggests that this market segment is significantly net short both AUD and NZD. The PAIN data is daily, as opposed to weekly for the CFTC data, and it shows only modest squaring of short positions in AUD and NZD in recent sessions.”
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