Last week’s outlook could be almost reprinted as there hasn’t been hardly any change. Stop-loss orders were targeted and triggered but we are back where we started. My overall bias is to sell rallies in Q1 whilst the market is still bullish USD but with rate-cut expectations being lowered by 50bps for 2012, the AUD remains a difficult currency to short. The AUD will only break sharply lower if risk aversion suddenly picks up steam again.
Stick with the .9900/1.0500 range, and as we are currently exactly in the middle of this range, short-term moves are a complete coin toss.
Retail sales data later this morning might liven things up a bit.
