I must admit that I’m a bit surprised that the AUD is holding up so well, in what should be a ‘risk-off’ market environment. AUD/USD fell sharply on Friday night and also recovered sharply, but I’m going along witrh the initial move and initiating a short position. I’m expecting volatility to increase so hopefully I’ll get some opportunities to trade dips and rallies over the next few days. EUR/AUD remains the main wild-card and if we continue to see large real money flows out of the EZ, then this particular cross should see more heavy pressure.

In AUD/USD, the technical levels to watch are 1.0145 and 1.0385.