The reflation trade has come under pressure in a big way after the combination of poor US retail sales and plunging inflation data. AUD/JPY and NZD/JPY are being sold in particular. This has helped push USD/JPY through support at 99.30, triggering stops.
The market is up to its eyeballs in Aussie and vey short JPY, so we could be in for a pretty deep pullback. 0.7210 is good support for AUD. Stops are just below.
US equities are now about 1.3% below the highs seen just before the data.
