Shorts have had to cover, after a nasty bounce off the lows. AUDUSD was sold down thru 8940, tripping stops in the process to stabilise just above 89c. Traders are saying that there is not much liquidity in the market, with prices gapping on the way down and on the way back up as shorts scrambled to cover. It seems players are now stating to realize that the initial reaction to the CIT news maybe overdone, given the bankruptcy deal has been on the cards for a while.
Several bouts of AUDJPY selling by investment banks has also been seen this morning, triggering stop below 80.00.
I thinking we have seen the low for the day, but players are still keen to sell a failure above 90c. Look to play 8900 – 9000 with a bias to still sell a rally.
