The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Mark McCormick NEW YORK ( BBH FX Strategy) -- The Australian dollar (AUD) has been among the top performers in the G10 since market sentiment bottomed out in late September. The strength has caused the currency to test its 200-day moving of 1.0383 (U.S.) dollars. In our view, this sharp move was a function of multiple factors including: 1) increasing optimism over Europe; 2) better-than-expected U.S. data; 3) a significant accumulation of net-long USD amid a sharp adjustment in speculative positioning; 4) hopes that China avoids a hard landing; and 5) Australian domestic economic data. However, we suspect that the AUD is likely to remain under pressure in the near term as coming eurozone policy meetings are likely to weigh on risk appetite. We remain constructive of the Australian dollar/dollar currency pair (AUD/USD) in the medium term because of our baseline expectation that China avoids a policy mistake and a hard landing. But we see immediate downside risks to the AUD/USD because of the elevated uncertainty ahead of the European events in the coming weeks and the extended short-term positioning. Taken together, this may lead the AUD to pare back some of its recent gains with the 20-day moving average (0.988) likely the next major level of support. In particular, short-term positioning data and technical indicators show that the AUD/USD is likely overextended (see chart).