Dead Cat Bounce?

What now..... market turning focus back on Fed going for QE3 (lite or whatever)? This seems like the best fundamental excuse to trigger a short squeeze in currencies for the next couple of days. For those who are ambitiously holding on to your shorts, just be careful though I still see currencies breaking lower following this correction.


Like I mentioned yesterday, I expected a counter-directional move... it started and should possibly last till post FOMC. 

E$ led the pack as the EURxxx was lending support yesterday. But we should see softer EURxxx as other currencies correct higher. 1.3090/110 to hold and as I type, E$ has already spiked to 1.3170. 1.3210/20 to cap (1.3240/50 news induced).


Have a great trading day and I will update again later.


Update1: Don't think the short covering in the currencies is over yet. Not deep enough to take the weak shorts out yet. Heard on E$ 1.3100/1.3200 option expiring NY cut, so market should stay within the range before higher toward 1.3220/30.
Hearing large sell order around 1.3300.