AUD/USD: 0.8930EUR/USD: 1.3210The Aud remains on the back foot, with the confusing Chinese data, yesterday, offering little clarity and it is currently sitting just above its lows after the improved US data led to US$ gains, and is seemingly headed towards the major target at around 0.8850/60.
The 4 hour charts are becoming very oversold so we need to be prepared for the chance of a bounce back towards 0.9000 and possibly even towards 0.9100, although this currently looks unlikely.
Below 0.8900 and the 0.8850 target, 0.8770 (22 August 2010 low) is the next attraction, below which there is not a lot to stop it from heading towards 0.8530 (50% of 0.6002/1.1082). While staying short strategically, keep an eye on the short term bullish divergence, which is hinting at the chance of a mild bounce before the downtrend resumes. I would therefore keeps stops fairly tight at around 0.8975, although we are unlikely to see it, I suspect, before the NFP unless the domestic Retail Sales surprises to the upside.
Economic data highlights will include:
PPI, Retail Sales
