When we ask for advice, we are usually looking for an accomplice. ~ Marquis de la Grange

Good morning. Short-term trends of several currency pars have been derailed yesterday – or rather delayed – by the coordinated central banks intervention. For those of you who’ve been busy doing something else and missed the news, now wondering what happened – while looking at the huge moves on the charts: the Federal Reserve, European Central Bank, the Bank of Japan, the Swiss National Bank, the Bank of England and the Bank of Canada moved in a coordinated action to provide liquidity to the global financial system. Yes – these are the same type of actions that were being taken in 2008, during the financial crisis. And yes – their moves to keep money flowing were enough to trigger investors / speculators’ euphoria as they decided to take more riskier bets. One should ask whether this action was triggered by a pending failure which is not publicly known (yet). Well, central banks interventions are part of the game and we all know which is the most volatile market, so it should come at no surprise if you wake up and see a 3 figures rally in EURUSD or other major pair. Now let’s see how the charts look like today

USD Index

Resistance near 80 stays intact after yesterday’s pullback. Some are probably calling a double top, hence a reversal underway, so let’s keep an eye on 78 where near-term support resides. I, for one, am expecting more upside for the dollar

USD Index Chart Daily 12-01-2011

EURUSD

Resistance at 1.3430/50 has been taken out yesterday so we’re back into the range between 1.3430 and 1.36. Anyway, I don’t think that the key support is 1.3430 as yesterday’s 4-hrs bar is large enough to expect a correction towards up leg’s median value, somewhere around 1.3350/70 – so that is where I’ll be carefully watching how price reacts. Although some of my plans and positions discussed recently have been canceled or turned bad, I remain bearish on EURUSD and will look for more selling opportunities

Euro vs US Dollar Chart 4hrs 12-1-2011

AUDUSD

The Aussie dollar rallied almost 400 points yesterday but is pulling back right now, after reaching the 62% retracement value of last down leg. Bears should be careful – as there’s probably a big chunk of buying orders waiting around 1.0070/00

Australian Dollar Vs US Dollar Chart Daily 12-1-2011

USDCAD

Now that the US dollar is well below corrective levels which shouldn’t have affected the upward trend, it’s time to keep an eye on resistance around 1.0260 again. I’d prefer to buy on a new break above but on the other hand I suspect that current recovery could be corrective, so I’m not that confident about greenback’s renewed strength. Patience is golden

US Dollar Vs Canadian Dollar Chart 4hrs 12-1-2011

EURAUD

Euro’s decline highlighted in my Monday’s report reached the target at 1.3200 and it didn’t stop there. A recovery is underway but I don’t think it’s a good idea to be on buyers’ side, but rather wait for signs of weakness

Euro Vs Australian Dollar Chart Daily 12-1-2011

have a great day!

- Continue reading: Euro / Risk Pairs Consolidating Gains After Major Central Banks Intervention