The market remains very long the AUD, particularly against the EUR and the GBP judging by the latest IMM data, and many of the biggest speculative positions are held by hedge funds. Being long the AUD was a no-brainer; relatively high interest rates (and rising), a strong economy piggy-backing on strong Chinese growth and a domestic market which managed to avoid most of the big shockwaves after the GFC. If the hedge fund market feels that it has to start reducing its AUD positioning then the Aussie could be in for another sharp fall.
Strong chart support at .8575 is still holding but the bounces at the moment are unconvincing.
