AUDUSD - profit taking after the risk off sell-off

Despite Monday's 5% drop in the Shanghai Composite, the AUD/USD managed to squeeze in a short relieve bounce. However, the support bounce is not convincing and the fundamental picture signals further shorts. All it takes is another strong down day in China and the Aussie could continue it's move down.

There are two support levels just above each other but once they fall, there is a lot of downside potential. Although we are overall very bearish on this one, we remain on the sidelines until the two levels have been broken.