The 50bps hike in the Chinese reserve requirement ratio (RRR) added even more pressure to the AUD which was labouring already under the impact of the floods. The fact that the market is generally long AUD for a carry trade is also weighing on the AUD. There has been talk in the market of some decent sized AUD/JPY buying related to fresh Toshin or Samurai launches but even with this, the AUD is likely to struggle at least on the crosses. EUR/AUD for example has put in a strong technical base and looks set to test it’s 100-day MA at 1.3730.