In a session reminiscent of the financial crises in 2008, markets were slammed overnight as fear of another global crisis triggered an avalanche of negativity. As anticipated the European central bank kept interest rates on hold at 1.5 percent. In a contentious move the bank also signaled their intent to stimulate the economy by entering the bond market once again, but failed to address the more immediate problem facing the market, namely Italy and Spain.

The move provided little solace to market participants, triggering immediate selling across global markets. General fear the economic dilemmas that the peripheral countries has faced will spread to the heart of Euro-zone, namely Italy and Spain, which are now the focal point of the Euro-zone debt crises. This was exacerbated by the ECB which signaled intent to provide relief for peripheral economies while neglecting the heart of the Euro-zone. The baton was handed to US markets which ran with the theme of selling with the Dow and S&P500 falling 5.08 and 4.78 percent respectively.

It's been a tumultuous week in the markets roiled by the constant theme of negativity forcing both the Swiss Nation Bank and the Bank of Japan to intervene in the currency markets in an effort to weaken their currencies.

Commodity block currencies were hit the hardest with the Kiwi, CAD and Aussie succumbing to the decidedly risk-off market demeanor. The Aussie dollar has taken a spectacular hit with price action falling below 105 US cents to lows of 104.48 US cents to represent a 5 percent drop for the week. It's been a week of extremes for the Aussie which kicked off near to post-float highs, but add to the mix a bout of global risk aversion, unwinding of local rates expectations and bad run economic data and you've got yourself a recipe for weakness.

We're expecting selling to be contained around the 103.85 US cent levels in the domestic session which represents long term support with the upside contingent on how Asian markets fare throughout the day with the RBA Statement on Monetary Policy also likely to induce some short term moves.  At the time of writing the Aussie dollar is buying 104.6 US cents.

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