• Euro fails to keep the pair above 1.2500
• Swiss Franc struggles through 1.2400
• Canadian dollar remains in tight trading range

Market Outlook
Dollar continued to reassert its dominance over the majors, with greenback longs consolidating their recent gains, as majors took full advantage of the pause in price action to take back some of the territory. However as liquidity comes back into the market, traders should expect the greenback continue to strengthen in a near-term as recent action became overextended to soon to fast.

EUR/USD - Euro bulls once again tried to reestablish their dominance as single currency longs launched a counteroffensive against the greenback positions after the pair found some active bids around the 1.2400 figure. As greenback bulls consolidate their recent gains, a continuation of the dollar advance will most likely see the pair head toward the first line of euro defenses at 1.2333, established by the 20-day SMA A break below most will most likely see the greenback break through 1.2300 and take on 1.2249, a level marked by the 23.6 Fib of the 1.3477-1.1869 USD rally. A move toward the 1.2250 also should be a decisive for the greenback bulls as it would signal a continuation to the downside due to the break below the trendline that dominated the price action since middle of July. Indicators continue to favor euro with momentum indicator and MACD both above the zero line, while Stochastic and RSI both tread below overbought thus adding to possibility of a pullback.

Key Levels & Technical Indicators

USD/JPY - Japanese Yen longs continued to retreat after the dollar bulls successfully penetrated the yen defenses protection the psychologically important 110.00 handle. As the price action remain in favor of the greenback longs, a further move to the upside will most likely see the pair head toward 111.06, a 50-day SMA, with further collapse of yen defenses seeing the dollar bulls taking over the 23.6 Fib of the 104.18-113.74 USD rally at 111.44. A sustained momentum of the greenback advance will most likely see the fall of 112.62, a yen defensive position established by the August 8 daily spike high and a gateway to the 2005 high at 113.68. Indicators support the yen longs with both momentum indicator and MACD below the zero line, while both oscillators are sloping downward toward the oversold line.

Key Levels & Technical Indicators

GBP/USD - British pound bulls lost their will to fight after the dollar longs succeeded in taking a 1.8400 level from them and set the pair up for further move to the downside. As the greenback longs continue to take the shine away from sterling bulls, a move toward the 1.8251, a 50.0 Fib of the 1.9219-1.2784 USD rally will most likely open the next round of pound defenses at 1.8179, a level marked by the August 12 daily high, which is currently reinforced by the 20-day SMA. Indicators are signaling trending conditions with both MACD and momentum indicator above the zero line, while Stochastic is treading above the overbought line, and ADX is above key 25 mark, crossing of which signals an existence of a trend, not a direction.

Key Levels & Technical Indicators

USD/CHF - Swiss Franc longs decided to retaliate against the greenback and decisively pushed the pair below the 1.2400 figure only to encounter a trap, which the dollar bulls sprang on unsuspected Swissie longs. As the dollar bulls continue to reestablish their dominance, a sustained move above the 1.2400 handle will most likely see the pair head toward the 1.2472, a level marked by the 38.2 Fib of the 1.1492-1.3081 USD rally, which is currently protecting the psychologically important 1.2500 handle. A break above the 1.2500 will most likely see the pair take on the Swissie offers around 1.2544, a 20-day SMA. Indicators began to signal oversold conditions with both momentum indicator and MACD below the zero line, while Stochastic is treading below the oversold line.

Key Levels & Technical Indicators

USD/CAD - Canadian bulls longs remained continued to engage their US dollar counterparts in a tug-of-war as the pair remained unchanged in a tight trading range that dominated the price action for the past few trading sessions. As the greenback bulls gather their forces together and push the CAD higher, a break above 1.1900 level will most like see the US dollar bulls take on the 1.1935, a 78.6 Fob of the 1.1720-1.2733 USD rally, with a break above taking on the 20-day SMA at 1.1966. As US dollar longs remain on a war path, a psychologically important 1.2000 handle remain a key target, as it currently acts as a gateway toward the 1.2106, a 61.8 Fib of the 1.1720-1.2733 USD rally. Indicators are beginning to favor greenback traders with Stochastic slipping below the oversold line, while MACD and momentum indicator below the zero line continue to support the Loonie traders.

Key Levels & Technical Indicators

AUD/USD - Australian dollar longs once again tested the US dollar defenses around the .7700 handle, but failed to make much headway as the pair dipped back below the figure.  A reversal from these levels will most likely see the Aussie longs fall back toward .7605, a 38.2 Fib of the .7991-.7374 USD rally that is further reinforced by the 20-day SMA. A further advance by the US dollar longs will most likely see the Aussie head toward the psychologically important .7500 handle. Indicators signal a move to the downside with MACD sloping toward the zero line and momentum indicator below the zero line, while Stochastic became overbought adding to the downward bias outlook.

Key Levels & Technical Indicators

NZD/USD - New Zealand dollar bulls shed their horns as the Kiwi prepared itself for a long flight south below the psychologically important .7000 figure. As greenback longs get ready to hunt flying Kiwi's a move below the psychologically important .7000 handle will most likely see the US dollar longs take on New Zealand dollar bids around .6986, a key 38.2 Fib of the .7468-.6681 USD rally. A further collapse of the NZD defenses will most likely see the greenback bulls crash their way toward the .6873, a 23.6 Fib of the .7468-.6681 USD rally. Indicators remain supportive of the New Zealand dollar bulls, with both MACD and momentum indicator above the zero line, while overbought Stochastic adds to the outlook that Kiwi has reached the end of its  north bound flight.

Key Levels & Technical Indicators