Reinforcing Trend & Counter-trade Strategies

As the year draws closer; market sensitivity is clearly seen by the indecisiveness of price swings across the forex market where the USD weakness was relatively drawn from the Federal Reserve seen increasing the ante by as much as USD4T of new asset purchases. The USDx is working @80.09 basis point lower from the day's high marked at the 80.57, although seen as a corrective move from a more fundamentally oriented market as of today.

With the market quietly pausing during both the Asian-European sessions prior to the US market's more choppy price swings; we have seen that a more direct effect has taken place for Cable moving back higher from a registered low @1.6000 even then a recovery move took place in a slower pattern as the US market opened. Apparently, since the USD follow-through did not materialize, a trailing stop to cash-in our short-Cable on the way higher was initiated alongside a counter-trend /Trade strategy utilizing the GBPJPY as the primary currency of choice as indicated in the figure 1. Expect a daily follow-through from this reinforced Trend for the Cross Rates prior to Wednesday Fed policy report and the Fiscal Cliff.

On the tech-perspective: The GBPJPY 4hour chart formation simply showed a double bottom formation with a stronger support @131.65 and a spinning top prior to the session rally. Likewise the key price refernce for the other EURJPY cross is still at the 105.50/65 levels. That is why we have since then that both cross rates are within a "Reinforced Trend" But more importantly, disecting the time-frame within the 4hour segment would be a typical market timing developed alongside with timing the other correlated currency pairs before actual execution. In essence, its also helps when trading skills related to market timing must be part of due diligence before any trading decision can be made. Remember, nearing the end of the year's trading activity and last quarter for the year; a short-term three (3) days trading exposure would be more applicable at this time.
Clearly market participants have renewed their trades and shifted positions based primarily from the recent COT; where increased OI on both sides of the market took place with the Aussie$ taking the lead while European currency pairs were net short. However, this was prior to the expected announcement by the Fed regarding pumping up assets which drove the USDx lower while both Euro & Cable rallied to their present prices @1.2993 & @1.6108 respectively. Expect a relatively choppy price action across the board on both major pairs while the  AUDUSD and the AUDJPY remains resilient and trending higher will be dominant. Of course with some price adjustments nearing the end of the month's trading. Prices have achieve our first target at the 1.0510/15 levels as of this writing.