At the Close. Correction....or something else?

18:00CET

It was more or less expected that after the USD moves seen in recent days, sooner or later we would have a day where things would at least come to a halt, thus it would then be time for renewed speculation on what would happen next. Well, that projected day was/is today, and thus we have to analyze things a bit more in detail to try to guess where we are headed from here.

First, EUR/USD broke (and remains above) the 1.3570 resistance level, and moved past 1.3660 second important resistance, where it failed to advance further and lost ground. Right now is testing the intermediate level 1.3615/20. Only on a clean break of 1.3750 should USD bulls have a tough time in defending their positions in my opinion.

Second, USD/CHF and USD/JPY, despite their modest sell-offs in the morning, have recovered all lost ground and in the case of USD/CHF, we've hit parity for first time in many months, at the time the unit was testing an important short-term dynamic resistance line, therefore shorts have taken control and we're off by 50 pips and I'm afraid there is more to come, unless EUR/CHF inverted SHS pattern comes to life faster thane expected, but that's not for me to decide. FOr the time being, selling USD/CHF looks like a good strategy if you don't like the USD-long way.

Third, Cable and Aussie/Gold. Cable is very stubborn today, and it's refusing to go down even a pip, and the 1.5975 resistance has become now tough support. As for AUD/USD and Gold, the fact that the latter has a key dynamic resistance line (former key and primary uptrend line) @ $1,358 which is still holding a first pullback attempt, is making the unit less active than its peers today, with 0.99 so far capping the upside, but I would wait to see if that level holds, for it marks 38.2% of the latest downleg, and a break exposes 0.9950 (50%) and more importantly 1.0005 (61.8%).

With this in mind, let's have a last look at how retail traders are doing at this hour on their long/short ratio. Still too many longs in EUR and GBP pairs, I still don't feel comfortable with that...

Nov 18, 2010 18:00 GMT+01h

   1. USD/JPY
      75.73% 24.27%
   2. XAU/USD
      75.31% 24.69%
   3. USD/CHF
      70.48% 29.52%
   4. USD/CAD
      62.15% 37.85%
   5. AUD/USD
      50.11% 49.89%
   6. EUR/USD
      46.76% 53.24%
   7. GBP/USD
      41.70% 58.30%

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