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Australian Dollar Sinks To Fresh 10-Month Low, Where Next?

|Includes:CurrencyShares Australian Dollar Trust ETF (FXA)

AUD/USD sank below 0.9950 to the lowest since June 2012 as speculators abandon the one of the great trades of the past 6 years.

AUD/USD is down 80 pips to 0.9944 after tripping stops below 0.9950. A larger cluster of buy orders is around 0.9925 with others at 0.9900 (stops below) and 0.9885.

Weekly CFTC futures positioning showed Aussie longs at the lowest levels since mid-2012.

(click to enlarge)Click to enlarge

Technically, the AUD/USD daily chart has completed a long-term sideways consolidation with a breakout to the downside. The simple measured target of the move coincides with the June 2012 lows around 0.9600.

(click to enlarge)Click to enlarge

Generally, I prefer to sell on a re-test of the old range. That would mean a sell order around 1.0100.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: FXA