Christmas has come early for traders as volatility in the new year continues to be off the charts! China's woes have spilled over into the market and today is expected to be no different and traders are now waiting for the China response, in this case most likely hard-line policies to stop the share market tipping over all together. The devaluation of the Yen has not helped to stem the flow and investors will be looking for reassurance in the current market environment. I had expected some sort of response yesterday from the PBOC, but alas it looks like today might be the day after the circuit breaking episode yesterday.

The NZD continues to find itself under pressure as a result of the Chinese market as well as weak commodity prices as usual. Today's jump higher was met with resistance at the 50 day moving average, and has since fallen back to sit on support at 0.6615. From here the market will be looking for further signals before dropping any further, and the Chinese market will likely be the catalyst for any further drops. Any drop lower is likely to find the next level at 0.6517, and this will be important for traders looking to exist out of NZDUSD trades.

Oil has also felt the pressure and slid down the charts to touch on major support at 32.09, this  level has not been touched since 2004 and the market movements today were met with real aggression before traders looked to exit on uncertainty. I still feel that fundamentals are currently not right when it comes to oil markets and we will see further falls into the high 20's before any sort of major market correction kicks in and equilibrium looks to be found in the current market. The next level of support here is 29.49 and at this level the market will be looking for some real signs of fields being mothballed and supply actually easing off.

The Australian dollar has also been under immense pressure as a result of china and also the major drop off's in commodities. Copper especially has fallen to $202 and the market continues to punish the Australian dollar as metals come under pressure. In addition to this building approvals m/m have fallen sharply to -12.7% and many will now be looking to see if Australia falls into recession, which will stoke the Reserve Bank of Australia to act and cut rates further.

Support now for the AUDUSD can now be found at 0.6981 and it's likely this will come under further pressure given the economic situation globally.        For now though, today's movement will be interesting as previous support at 0.7022 is currently being treated as resistance and a rejection here from any movement higher will be a very strong bearish signal. Certainly, one that I would expect the market to react strongly to. 

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