The dollar made it through the day relatively unscathed with selling concentrated mostly against euros and Aussie dollars. I am still in the dollar-bull camp and will continue to look for long-dollar positions until the market proves otherwise. The strongest case for a higher dollar is Cable, which is tip-toeing above significant daily trendline support. Should today's 1.9560 area lows give way, wave c of A could begin to unfold bringing 1.9306 target into play. We currently trade 1.9589.

I would like to setup GBP/USD shorts on a retracement of today's massive huge down, but a problem arises with sheer size of the move; it's difficult to find solid resistance to lean against for stop placement. Instead, and I hate to say it, but I will be watching Cable at the lows to possibly stop into a short position. Another thing that worries me about being short GBP/USD is EUR/GPB. EUR/GBP has had an equally impressive move higher on the back of Sterling selling. But there is significant trendline and 1.0 projection resistance at 0.6685 that prevents me from wanting to be short GBP/USD into this EUR/GBP level. If EUR/GBP finds resistance and begins to move lower, this will bring Sterling buyers into the market, which then severely limits the GBPUSD downside.

We have been very active this week, so a night of watching price action ahead of the Friday move might not be a bad idea.



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

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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.