Mr. Bernanke is scheduled to testify today at 2:00 p.m. ET before the Joint Economic Committee on the economic outlook. The dollar will be unlikely to commit to a direction prior to 2:00 p.m., but we have seen that all week. The market just feels as if it's heavily short dollars and if any reason to cover those shorts presents itself, it should be a swift and violent profit-taking move in EUR/USD and USD/CHF.

EUR/USD has continued to battle with these multi-year resistance levels ranging from 1.2425-1.2450 and evidence of failure has just recently developed on the larger, 4-hour chart. A 1.272 Fib extension and the upper end of the parallel trend channel contained price setting up a 60-point EUR/USD push lower in London last night.

 
The larger 4-hour parallel trend channel shown in red contains a smaller, 60-minute uptrend channel shown in gray. We will use this as our trigger point today to enter shorts on a retracement to the breakdown point after the market has shown its hand. And that hand better have sell cards in it. We need to have a compelling reason to fight this trend and only a breakdown through the channel to a 1.2380 low followed by a retracement 1.2405-15 area is a compelling reason enough. Stops should be over 1.2440 and the target is the measured move CD as compared to AB.

Swissy is another one trying to fight off the excessively oversold nature of a measured move AB=CD down into massive support zone 1.2650. You want to see how powerful 1.2650 was? Take a look at the EUR/CHF chart over the last three days.

A move above the weekly highs of 1.2750 will bring a test of the upper end of the parallel trend channel and recent highs at 1.2825. Use stops not closer than 25 points on the break and if you prefer, buy the first retracement after the break from the 50 level.

Keep an eye on Aussie at the 0.7480 level in the event the dollar does not get the rebound we are looking for. 0.7480 is a massive AUD/USD support level from the former daily downtrend and multi-month resistance levels. I am running short on time or I would post a chart.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.