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Yesterday’s disappointing China imports reading set the tone for the AUD and it just keeps getting worse. Two of Australia’s key commodities, crude oil and iron ore, have been consistently under pressure and this will hurt our terms of trade. Unless China deploys stimulus it certainly doesn’t seem as though the anticipated recovery in activity in the back end of the year will eventuate. Locally, NAB business confidence and conditions dropped off significantly after having shown some signs of a recovery the previous month. AUD/USD's losses accelerated on the back of the data and it is clearly a momentum play right now as the pair races southbound. With the price action now firmly below $0.8300, the pair is trading at its lowest since July 2010 and traders will be eyeing May 2010 lows in the $0.8067 region. There will be plenty of focus on China with plenty of economic data due for release this week. I feel risk will be largely pinned on how China responds to the raft of data releases. In terms of trading opportunities, traders who aren’t already short could consider selling rallies back into $0.8300. There is a reasonable chance May 2010 lows will be tested in coming weeks, particularly if next week’s Federal Reserve meeting takes a hawkish shift.