Flash: Domestic events to trigger AUD/USD short-squeeze?

FXstreet.com (New York) - The recent global security situation following the US’s travel warning did not prove to be an important factor for markets over the past week, however barring a major event that is likely to be the case for the week ahead as well, suggests Greg Anderson at BMO Capital Markets.

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However, “global security and local politics are background factors that might get a bit of market attention in a slow news week for economic data. The Australian election is now less than a month away.”

On Tuesday, the Australian Treasury issues are pre-election report on the economy and the fiscal situation. A positive outlook from that report may be interpreted as political ‘spin’ but with the market still trapped in very short-AUD positions, it could possibly trigger a further short squeeze in AUD/USD and AUD/CAD.”