The main event during today’s Asian session will be the HSBC manufacturing PMI for China. Given all the recent reports out of China, a number even lower than last month’s 48.1 would not surprise (any number below 50 signifies industry contraction).

With many of the big stops now done below 101.00 in USD/JPY, it would not surprise me at all if we had a look topside to see if there are any more stops up there! It’s simply the type of market that we are in. Some of the really big market players are tying this pair in with option strategies and it’s pointless trying to fight them.

The GBP continues to show it’s resilience and surely it’s only a matter of sessions before we see EUR/GBP trading with a 7 in front of the rate. Resistance in the cross should now be formidable near .8160. Cable looks likely to test 1.70 again and if that breaks, and EUR/USD starts trading below 1.3650, then we will have a classic scissors move in play.

I remain firmly in buy-dip mode for the AUD/USD. The important support levels are near .9150 and whilst we could see stops triggered below there (as that’s the type of market we are in!) I still think that the market is overly bearish AUD at the wrong levels (see EUR/AUD for instance).

Good luck today.