The GBP USD fell sharply on Tuesday, triggered by negative comments from Bank of England’s Adam Posen regarding more quantitative easing. Posen said that more QE is going to be needed in order to lead the UK economy to full recovery. Posen suggested that further fiscal stimulus and corporate debt buying might be needed if this round of QE is not enough.

December Gold posted a weekly closing price reversal top, indicating the possible start of a substantial decline. This type of pattern typically indicates the start of a 2 to 3 week break equal to at least 50% of the last rally. This makes $1212.00 the next likely downside target.

December Treasury Bonds posted the rare daily/weekly closing price reversal top this week. On Wednesday, the T-Bonds formed a daily closing price reversal top and on Friday, the market sold off far enough to form a weekly closing price reversal top. Both of these chart patterns suggest that the selling is greater than the buying at current levels.

The U.S. Dollar finished the week sharply higher after posting gains against all the major currencies. The catalyst behind this week’s strength was the action by the Fed to stabilize its balance sheet by shifting assets from mortgages to long-term debt. This sent a signal to already worried investors that the Fed was making room for the possibility of a prolonged downturn in the U.S. economy.