There has been very little let-up in the Aussie selling today as macro accounts head for the hills. Fears of a sustained tightening of Chinese liquidity is undermining the Oz to a significant degree and has cut risk appetite across many markets, including commodities.
Technically, AUD has broken below the 38.2% retracement of the 0.8733/0.9330 rally at 0.9102 level and has its eye on the 0.9032 level.
Chinese data tonight will be critical for AUD, but tricky. With markets increasingly concern about China removing its generous fiscal and monetary stimulus, strong data could spark fears of a credit clampdown which could weigh on the AUD. A Goldilocks set of data (not to0 hot, not too cold), will be the most beneficial for AUD.
If there is a knee-jerk rally in AUD after very strong data, trapped longs will likely use strength to lighten up. 0.9120 and 0.9170 are logical spots for them to let some go.
Disclosure: No positions