There is a fairly clear downtrend in play here but the signs are strong that this pair’s recent fall is running out of steam. The inability to hold losses below 1.0165 was one sign and another was the fact that the pair rallied despite worse-than-expected jobs data. There is still solid selling interest near 1.0300/20 and this is most likely speculative players adding to existing shorts. Latest IMM data showed that market longs had decreased by 30% in the week up to October 9th and prime broker reports say that the professional market is already short. More dovish newswire comments from RBA Chief Stevens saw the AUD fall in late NY trade, triggering intraday stops below 1.0235. Stronger than expected weekend Chinese data should ensure that the AUD begins the week on a slightly bullish tone. The CNY has been trading at record highs near the base of its 1% trading band and the MAS has been intervening heavily in order to stop the SGD gain. Both of these factors should help AUD sentiment this week, with the first big risk event being Tuesday’s release of the meeting minutes. Bids are reportedly solid near 1.0180 and the breakdown level at 1.0310/20 remains the level to watch on the topside; play this range and expect momentum to increase markedly on a break.