The Advisor Weblog

Posted: 05 Oct 2011 06:26 AM PDT

Yesterday's strong recovery against greenback was limited by strong midterm levels in several major crosses, suggesting up to now, movement has been corrective.

While the EUR/USD was halted at the 76.4% retracement of this year bullish run around 1.3360, GBP/USD topped at 20 SMA in the 4 hours chart, still bearish and today at 1.5490.

The EU looking for a coordinate recapitalization of financial institutions was not the only factor that triggered the strong come back in stocks: FED's Chariman Ben Bernanke, said that the Operation Twist did not accomplished its target, and sort of opened doors for QE3; QE3 means more money (despite worths nothing) so US investors hapily run to buy stocks (cheap as indexes were around year lows).

However, today better than expected ADP points for a positive NFP next Friday, meaning no QE3 needed, while tomorrow, more easing is expected from BOE and ECB. I still see current rises as corrective an unless a clear break of the mentioned key levels, not seeing too much of dollar slides.

Anyway, here is the short term outlook for major crosses, for the upcoming US session:

http://www.fxstreet.com/technical/analysis-reports/currency-majors-technical-perspective/2011/10/05/02/