Aussie

To no one's surprise following the Australian quarterly reports downward revisions yesterday, the NAB Business Confidence came in significantly weaker for October at -29 versus the September reading of -8. NAB Business Conditions were also worse in October at -11 versus -1 in September. The AUD has weakened on this report trading at Friday's lows on the 61.8% hourly retracement level (10/20 high 10/28 low). A break of this level could lead to the 50% retracement around the .6533 level. We will be watching closely to see if this level holds.

The Australian Westpac Leading Index Indicator came in better than the prior month at .1% for June versus a 0% reading the prior month. The index grew at an annualized rate of 2% in June, slowing from an annualized rate of 2.4% in May. This is the slowest growth rate of the index since July 2001. Westpac said the slower growth is attributable mainly to falling share prices, tighter liquidity, weak housing approvals and soft data for US Industrial Production.

The Aussie US Dollar pair continues to trade lower, in a sharp downward trend since the highs on July 17th at 98.52. With the USD strengthening, commodity prices falling and an economic downturn in Australia, the pair is down over 650 pips from the highs in just under 3 weeks.  Currently trading around the 92 handle, the pair has just broken the daily 200 day moving average. Reviewing the daily chart and the longer-term picture on the Aussie, there seems to be a lot of room to the downside, if the aforementioned themes continue to lead the market.