That's where the Aussie dollar finds itself this morning after the turmoil in Italian politics washed through markets sending investors scurrying for the sell button on risk assets as they dove into US and German bonds.
That the Aussie fell half a percent overnight is no surprise in this environment. That it didn't fall further - indeed that the big stock markets didn't either - is noteworthy.
It's a continuation of the story I've been telling for the past week or so - the drivers of the Aussie dollar are elsewhere right at the moment.
And while you might guess that means I'm bearish the Aussie again, my sense is the market reaction would have scared the heck out of the players in this latest Italian Opera. I wrote about it in Markets Morning earlier with the take that "we might see some backtracking" so that 5 Star and La Liga don't end up hurting the very people they were elected to look after - the Italian people.
We'll see, I could have the wrong end of the stick. It is Italian politics after all.
So for me, I see any dips toward 0.7430/50 as likely to be supported as long as 74 cents doesn't give way and as long as this doesn't morph into a full-blown crisis.
In the meantime, though it's fair to say the Aussie has broken the uptrend from the May lows just a little above 74 cents. That gives the Aussie a downside bias once again. 0.7470/75 looks like support if 0.7492/96 gives way. Below that it is 0.7447 then 09.
There is always a chance of a rally if things sort themselves out. But the day after the rock has been chucked into the pond is probably not the day. Not for a sustainable Aussie bounce anyway.
But if Italy turns, so too will the Aussie dollar. For the moment though, the bias is lower as the bigger downtrend predominates.
Have a great day's trading.
Chief Market Strategist
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