• Euro Stalls Around 1.2000
• British Pound Eyes 1.7500
• Swiss Franc Bounces Against 1.3000

Market Outlook
Dollar bulls temporarily halted their advance to consolidate their gains in order for any further major gains to manifest themselves. As the price action shifts into a higher gear, greenback traders should remain on the right side of the trade as retraces are healthy for any trend as long as the retrace don't turn into trends themselves.

1-Day Currency Pair Outlook

EUR/USD - Euro bulls managed to get a break from the attacking dollar longs as the pair slowed its descent around the psychologically important 1.2000 handle. A consolidation around the current price levels will be the moment of truth for the euro longs as a break below the 1.1982, a July 26 daily low, will most likely see the pair head lower and test the single currency defenses around 1.1876, a euro position established by the 2005 Low. A break of the current 2005 low at 1.1876 will most likely see the single currency surrender further ground to the greenback as it would confirm a dollar dominated trend and see the pair head toward the next major level at 1.1760, a 2004 Low. A break below the 1.1760 will most likely see the greenback longs push the pair toward the next psychological level at 1.1500, a level that currently defends the next level of major support at 1.1379. Indicators are favoring the dollar bulls with both momentum indicator and MACD below the zero line, while extremely oversold Stochastic adds to a trending outlook as most prolonged moves to the downside happened after oscillators became oversold.

Key Levels & Technical Indicators

USD/JPY - Japanese Yen longs finally received a break from the advancing greenback longs as the dollar bulls managed to push the pair above the 113.00 figure. As dollar longs consolidate their recent gains, a further move to the upside will most likely see the greenback take on the yen defenses at 113.68, a 2005 high and a gateway to the psychologically important 115.00 handle, which is currently defended by the 114.92, a 2004 high. A break above the 114.92 will most likely see the greenback bulls push the pair above the psychologically important 115.00 handle and take on the yen defenses around 115.76, a level marked by the September 4, 2003, thus seeing the dollar negate the advance made by the Japanese yen since late 2003. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, while overbought Stochastic most likely acts as a confirmation for the possible trend that started around the 109.00 handle.  

Key Levels & Technical Indicators

GBP/USD - British pound bulls managed to hold on to a shred of dignity as the price action paused after the dollar bulls pounded their way to the 1.7700 figure. As the consolidation sets in, the next move to the downside will most likely see the pair head toward the 1.7617, a level marked July 21 daily low, with sustained momentum seeing the pair heading below the psychologically important 1.7500 figure. A sustained breakout below the 1.7500 figure will most likely see the greenback longs take on the pound defenses around 1.7417, a level marked by the July 26 daily high. A further move by the dollar bulls will most likely see the sterling lose its shine as it will most likely give up the 1.7284, a 2005 low and a gateway to the psychologically important 1.7000 figure. A collapse of cable's defense at 1.7000 figure will most likely see the sterling give up further ground with next level of effective defenses seen around the 1.6300-1.6500 zone. Indicators favor the dollar bulls with momentum indicator and MACD below the zero line, while oversold Stochastic adds to the out look that the price action will most likely remain on the side of the dollar longs.

Key Levels & Technical Indicators

USD/CHF - Swiss Franc longs made another attempt to stave of the tide of dollar bulls as greenback longs pushed the pair within a striking distance of the psychologically important 1.3000 figure. As the price action enters a short-term consolidation mode, which is healthy given the progress made by the dollar longs, the next move by the dollar bulls will most likely see the greenback take on the Swiss Franc defenses around 1.3081,a level marked by the 2005 High. A sustained break to the upside will most likely see the dollar longs push the pair toward the 1.3226, a CHF defensive position established by the April 26, 2004 daily high. A further collapse of the Swissie defenses will most likely see the pair retreat toward the 1.3389, a level marked by the October 6, 2003, thus supporting a view that the long-term multi-year dollar trend has already began. Indicators continue to favor dollar longs with both momentum indicator and MACD above the zero line. Stochastic remains extremely oversold thus adding to the trending market outlook.

Key Levels & Technical Indicators

USD/CAD - Canadian dollar bulls joined other majors in consolidation as stall in the price action spilled over into the USD/CAD. As greenback longs resume their advance and push the pair above the 1.1794, a level marked by the 20-day SMA, a next move to the upside will most likely see the US dollar push the pair against the Canadian dollar defenses around 1.1830, a level marked by the September 19 daily high. A further advance by the greenback will most likely see the pair head toward 1.1890, a level established by the 23.6 Fib of the 1.2735-1.1629 CAD rally. A further move to the upside will most likely see the US dollar take on the CAD bulls around 1.1973, a level marked by the 50-day SMA, and with a further collapse of the Loonie defenses seeing the break above the psychologically important 1.2000 handle and take on the next round of Loonie defenses around 1.2030, an August 30 daily high.. Indicators continue to favor Canadian dollar bulls with both MACD and momentum indicator below the zero line, while neutral oscillators give US dollar longs enough room to maneuver.

Key Levels & Technical Indicators

AUD/USD - Australian dollar longs managed to hold on to their dignity as the pair found a temporary bottom around the .7550 mark, just a small distance away from the psychologically important .7500 handle. As the price action resumes in favor of the greenback bulls, a move toward the .7500 level will most likely see the Australian dollar surrender the.7514, a level marked by the 23.6 Fib of the .7991-.7374 USD rally. A next move to the downside will most likely see the pair head toward the .7457, an Aussie defensive position established by the August 31 daily low. A sustained momentum on the part of the greenback longs will most likely see the pair head toward the .7368, a 2005 low and a gateway to the next psychologically important level at .7000. Indicators are favoring the US dollar bulls with both momentum indicator and MACD below the zero line. Stochastic became oversold, thus giving the Aussie longs a chance for a pullback.

Key Levels & Technical Indicators

NZD/USD - New Zealand dollar bulls fought back as they could with US dollar bulls' temporarily halting advance that took the pair toward the .6800 figure. As greenback longs continue to pluck Kiwi's feathers and push the pair below the .6800 figure, a break to the downside will most likely see the pair head toward the New Zealand dollar defenses around .6773, a July 28 daily low. A further break in the Kiwi's defenses will see the pair retreat toward the .6685, a critical level marked by the 2005 low, breaking of which will most likely see the pair test the NZD bids around .6591, a level marked by the September 1, 2004 daily high, which currently acts as a gateway toward the psychologically important .6500 handle, a level not seen in over a year. Indicators favoring the US dollar bulls with both momentum indicator and MACD below the zero line; with oversold Stochastic adding to the outlook that the prolonged movement to the downside is here to stay.

Key Levels & Technical Indicators

Sam Shenker is a Technical Currency Analyst for FXCM.