The Australian dollar continues to find itself in hot water and under pressure on the currency markets as it underperforms globally. The recent data out of today from the ANZ business confidence index showed a steep drop to -29.1, this sort of dip has not been seen since 2009 and shows the worries in Australia about the Chinese impact that is spreading globally. So far the Chinese market has managed to stay buoyant after some serious pressure, I would not be surprised to see further speed bumps in the road though in the short term, and traders are pricing this in for the Aussie dollar at present. So further down the road today we are due to see some serious comments from the RBA after the cash rate decision which is expected to remain flat at this point in time.

While these comments are expected to show further weakness in the AUD's current position, it's also worth noting that the RBA has been looking to drive the AUD lower for some time, and this provide a serious opportunity to jawbone it some more. Moving away from the possibility of that, and the reality of trading the AUDUSD, I would look for pushes down to 0.7029, and the genuine possibility that we may see a test and breakthrough of this key level, which has so far sustained a large amount of pressure previously.

The Chinese data due out shortly in a few hours will have a large impact as well, and watch for equity markets in particular to be quiet heavily focused on the possibility of a disappointment followed by steep selling. In particular I would be focused on the FTSE, Nikkei and the S&P500 which has so far managed to recover all of its previous week's losses.

At present the S&P 500 has looked quite strong and many traders believe the knee-jerk reaction around China was overblown. Any large falls however, are likely to face fierce support at 1875.00 on the chart. I would expect that we might see the odd surprise so traders could position themselves to catch any sharp moves, but I would also be very weary with the surprises Chinese data can throw out.

Lastly, the Euro has been looking very interesting and this week is set to be quite data heavy on the charts. Recent CPI data has seen a boost to 0.2% y/y which was a much better than expected result from the markets, but seems to be in-line with the European Central Banks thinking on inflation in the past months, as they expect to see it pick back up to 2% over the next year to a year and a half. The recent energy price spikes will be interesting though on their forecasts, but trimmed CPI is still showing a lot of promise.

The EURUSD has held up nicely on support at 1.1154 and going forward it's quite possible we will see further climbs on the charts, as people will view this positively. Any drop through this key support level would see pressure on the downside though and further drops to the 1.10 range if the market is hungry enough. 

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