The AUD finally broke above its technical resistance band around .8870/80 and some serious short-covering ensued. I have given up on shorting the AUD for now and will sit back for a few weeks and have a rest. July markets are bad enough but August is usually worse so it’s a good time for a trading break.
The big event risk today will be the European bank stress tests which should be released very early in the European session. We will see some positional adjustment ahead of this but I doubt if we see any big moves in Asia. All the EUR/JPY stops that we mentioned yesterday have been done so that’s one less target for dealers to aim at.
Good luck today and TGIF.