• Japanese Yen Edges Closer To 115.00
• Canadian Dollar Consolidates In Tight Range
• Australian Dollar Tests .7500 Bids

Trader's Outlook
Market remains in a dollar bull mode, however given the easy the way euro slides back and forth through the 1.2000 handle, this trader believes that the market does not care about 1.2000, what market cares about is a strong support established by the 1.1760-1.1870 buffer zone that is keeping the EUR/USD from collapsing into oblivion as the zone is established by the combination of the 2004 and 2005 Low, thus adding to the importance of the support area.

1-Day Currency Pair Outlook

EUR/USD - Euro bulls continued to retreat as the pair tumbled below the psychologically important 1.2000 handle after the greenback bulls managed to undo most of the advance made by the single currency longs during the last week's anti-dollar rally. As dollar longs make their way deeper into the euro held territory, a collapse of the single currency defenses around the 1.1900 handle, will most likely see the dollar longs make their way toward the 1.1876, a critical level marked by the 2005 low, with further breakdown targeting the 1.1760, a 2004 low. A collapse of the combination of the 2004-2005 lows will most likely see the pair head toward 1.1546, a level marked by the October 17, 2003 daily low, which currently acts as a gateway toward the psychologically important 1.1500 figure. Indicators are favoring the dollar bulls with both momentum indicator and MACD below the zero line, while neutral oscillators give wither side enough room to maneuver.
 
Key Levels & Technical Indicators

USD/JPY - Japanese Yen longs once again found themselves establishing a new 2005 high as the pair edged closer to the psychologically important 115.00 handle, a level which is currently defended by the 114.92, a 2004 high. A further break of the yen defenses will most likely see the head toward the 115.76, a level marked by the September 4, 2003, thus negating the advance made by the Japanese yen longs for the past two years, with sustained momentum by the greenback longs most likely seeing the Japanese yen retreat toward the 116.67, a July 15, 2003 daily low. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, however an overbought Stochastic gives the yen longs a chance to retaliate.

Key Levels & Technical Indicators

GBP/USD - British pound bulls received no break from the advancing dollar bulls as the pair continued its journey south toward the 1.7284, a level marked by the 2005 low. A further break in the sterling defenses will most likely see the greenback longs push the pair toward the psychologically important 1.7000 handle, which is currently defended by the 1.7086, a November 20, 2003 daily high. A further collapse of the pound defenses will most likely see the greenback bulls push the pair below the 1.7000 figure and take on the sterling's bids around 1.9604, a defensive position established by the June 17, 2003 daily high, thus seeing the dollar reverse the advance made by the pound longs during the past two years. Indicators favor the dollar bulls with momentum indicator and MACD below the zero line, with oversold Stochastic gives the cable bulls a chance to retaliate.

Key Levels & Technical Indicators

USD/CHF - Swiss Franc longs continued to retreat as dollar longs once again pushed the pair toward the psychologically important 1.3000 handle. A move to the upside will most likely see the pair head higher and with sustained momentum will most likely seeing the greenback take on the 1.3081, a Swiss Franc defensive position established by the 2005 High, with a further move by the dollar longs will most likely see the pair head toward the 1.3226, an April 26, 2004 daily high. A further dollar advance will most likely see the pair retreat toward the highs not seen in two years as the greenback will most likely take on the Swiss Franc defenses around 1.3389, a level marked by the October 3, 2003 daily high. Indicators favor the dollar bulls with momentum indicator and MACD above the zero line, with neutral oscillators giving either side enough room to maneuver.

Key Levels & Technical Indicators

USD/CAD - Canadian dollar bulls remained in a consolidation mode as a tight trading range continued to dominate the price action, with neither side gaining an upper hand. As both side remain evenly matched, in case the US dollar bulls fail to recover and pullback toward their defensive positions, the next move by the Loonie will most likely see the pair head below the 1.1700 level and with further momentum take on the greenback bids around 1.1600 figure, a level marked by the 2005 low at 1.1594. In case the Loonie longs fail to launch a counterattack and retreat above the 1.1800 figure, the next move by the US dollar bulls will most likely see the pair head toward 1.1830, a level marked by the September 19 daily high. Indicators are diverging with momentum indicator above the zero line while negative MACD is sloping upward toward the zero line; with neutral oscillators giving either side enough room to maneuver.

Key Levels & Technical Indicators

AUD/USD - Australian dollar defenses collapsed under the weight of the latest greenback assault with the pair tumbling toward the psychologically important .7500 handle. A further collapse of the Aussies defenses will most likely see the US dollar longs make their way toward the .7457, an Aussie defensive position established by the August 31 daily low, with a further move to the downside most likely seeing the greenback longs push their way toward .7368, a level marked by the 2005 Low. A further collapse of the Aussie defenses will most likely see the pair head toward the .7286, a level marked by the September 30, 2004. Indicators are favoring the US dollar bulls with both momentum indicator and MACD below the zero line while overbought Stochastic gives Australian dollar longs a chance to retaliate.

Key Levels & Technical Indicators

NZD/USD - New Zealand dollar bulls remained stubborn even after collapsing toward the .6900 handle, but managed to land on their feet and once again opposed the greenback longs. As the price action remains on the side of the dollar longs, a further move to the downside will most like see the pair test the New Zealand dollar defenses at .6868, a level marked by the 23.6 Fib of the .7468-.6681 USD rally. A further collapse of the Kiwi's defenses will most likely see the pair head toward the .6773, a New Zealand dollar defensive position established by the July 28 daily low. A further breakdown of the Kiwi's defenses most likely seeing the pair test the 2005 low at .6685. Indicators are favoring the US dollar bulls with both momentum indicator and MACD below the zero line with neutral oscillators giving either side enough room to maneuver.

Key Levels & Technical Indicators

Sam Shenker is a Technical Currency Analyst for FXCM.