When trading the AUD you’re essentially expressing a view on China. USDCNH has been on a one-way tear of late and has weighed on AUDUSD, reflecting poor China economics, concerns of a credit event, but also the comparative returns seen in US Treasuries (over China bonds). We’ve seen underperformance in Chinese equity and industrial metals. The AUDUSD daily suggests the double top target of 0.6300 over the medium-term, and as we see in the price action, rallies have been savaged. It will take a while to get there, and the move will not be linear. For now, I see modest upside risk as shorts possibly cover given the PBoC has just announced a sizeable liquidity injection into the interbank market – but I would look to flip short into 0.6480. GBPAUD, EURAUD and AUDCHF have also been huge trades of late, and I would be taking some off the table to assess how headlines around China's fiscal stimulus play out.