The U.S. Dollar managed to close higher today despite late session attempts in New York to erase earlier gains. This is strong evidence that most of today's rally was due to short-covering rather than fresh buying. Comments from ECB President Trichet were supposed to show support for Bernanke's comments from yesterday, but actually helped ignite the rally in the Dollar. Technically, the Dollar is oversold on the daily chart. This is another reason for the up move today.

The EUR USD closed lower after European Central Bank President Trichet talked up the Dollar during the overnight session. Once again it looks like the Euro is having trouble with the $1.5000 area. The high for the year at 1.5063 in October has stopped all recent attempts to break this level. Traders seem fearful that the ECB may take stronger action other than verbal intervention to force the Euro lower.

The GBP USD closed lower after making a valid attempt to turn higher for the day. The uptrend has been strong in this currency lately as the bulls seem to have control over the market despite attempts by Bank of England Governor King recently to talk this currency lower. It looks as if traders are beginning to believe that the economy has bottomed and that the BoE is getting ready to reduce quantitative easing.

Weaker crude oil and lower equity prices helped support a strong rally in the USD CAD. Traders are also fearful of possible action by the Bank of Canada if they take the Canadian Dollar higher. The BoC wants a weaker currency to stimulate the economy. Last month the BoC's Harper issued a stern warning that the highly priced Canadian Dollar was curtailing the economic recovery.

Overnight the Reserve Bank of Australia released the minutes from its November 3rd meeting. The minutes hinted that an interest rate hike over the near term is not likely. This is helping to pressure the AUD USD this morning. This report was just a confirmation of a statement issued earlier in the month that current economic conditions warrant the central bank to maintain interest rates at current levels. The chart indicates that a break to .9155 to .9096 is likely over the short-run.

The NZD USD saw selling pressure today as demand for higher yielding assets dropped. Weakness in the Aussie Dollar also led to spillover selling. The main trend is down. The charts indicate that .7302 to .7301 is a possible downside target over the next 2 to 3 days.

The stronger Dollar helped the USD JPY form a closing price reversal bottom. A follow-through rally tomorrow will confirm the formation. This pattern usually leads to a 2 to 3 day rally and a 50% retracement of the last break. This means 90.53 is the next potential upside target.

The USD CHF is in a down trend and range bound. The main range is 1.0337 to 1.0035. This range forms a retracement zone at 1.0186 to 1.0222. Today's intra-day rally took the market into the retracement zone where it found selling pressure. This pushed the market lower where it finished off the high.