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EUR/AUD: This is our favorite trade for 2011 in general and with the market trading by fresh multi-year lows and deeply oversold, the risks for a major corrective bounce seem highly probable. We have taken shots over the past few days with no downside, and have once again taken a shot on Monday. The cross has finally stalled out just ahead of major psychological barriers by 1.3000 and any additional declines below this level are not seen as sustainable. Monthly, weekly, and daily studies are all in oversold territory at the same time, and this very rare occurrence should be a red flag for a potential trend change. Fundamentals are also playing their part in the trade, with China hiking rates over the weekend. The move to a more restrictive policy will inevitably slow growth which will in turn weigh on the highly correlated Australian Dollar. POSITION: LONG 1.3070 FOR AN OPEN OBJECTIVE; STOP 1.2970.