The dollar breakout proved to be a nasty head fake in the course of what could be several before the true dollar trend emerges for the remainder of 2006. So while the dollar is sorting out its longer term trend issues, we'll stick to the intraday charts to continue generating PnL.

A re-test of the uptrend channel breakdown level at Fib resistance could serve as a nice entry to sell weakness for a play back down to today's New York lows. Look to get short in halves at 1.2472 and 1.2495 with stops for the whole position above 1.2526. Be aggressive booking profits on an re-approach of the 1.2400 lows for tonight.

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

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