Technical Overview

• Euro Rebounds From 2005 Low
• Swiss Franc Defends 2005 High
• New Zealand Dollar Remains In Tight Range

Trader's Outlook
Market remains in a range trading mode as the latest price action suggests that the retrace that is in the works will most likely to occur in the upcoming week with the dollar bulls waiting  on the other side of the move to take advantage of the unsuspected traders. A longer term view remains in favor of the greenback as the multi-year trend just stated and the next large move will most likely see the 2003 levels come into play once again.

1-Day Currency Pair Outlook

EUR/USD - Euro bulls went on a full out offensive against the advancing greenback longs as the pair approached the 2005 low at 1.1866. A reversal of fortunes for the euro longs will most likely see the pair head above the psychologically important 1.2000 handle, with a further move to the upside testing the dollar defenses above the 1.2100 handle at 1.2122, a level marked by the October 17 daily high. A sustained momentum will most likely see the pair head higher and take on the greenback offers around 1.2253, a 23.6 Fib of the 1.3477-1.1869 USD rally. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

Key Levels & Technical Indicators

USD/JPY - Japanese Yen longs continued to trade sideways as the pair remained in the vicinity of the new 2005 high at 115.99 after the dollar bulls failed to push the pair toward 116.67, a level marked by the July 15, 2003 daily low. A further move to the upside will most likely see the dollar longs push the yen bulls toward the 117.70, a September 15, 2003 daily low. However a break below the psychologically important 115.00 handle will most likely see the pair head lower and test the greenback defenses around 113.99, a level established by the 20-day SMA. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, while overbought Stochastic gives the yen longs a chance to retaliate.

Key Levels & Technical Indicators

GBP/USD - British pound bulls managed to retaliate against the attacking dollar longs after the greenback failed to test the cable's defenses around 1.7393, a level marked by the October 12 daily low. As the price action switches gears and in short-term turns in favor of the cable longs a break above the 1.7624, a 20-day SMA will most likely see the pair head higher and test the dollar defenses around 1.7725, a 23.6 Fib of the 1.9219-1.7284 USD rally.  Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

Key Levels & Technical Indicators

USD/CHF - Swiss Franc longs managed to stop the greenback advance in its tracks as the pair was pushed against the 1.3081, a level marked by the 2005 high. A reversal form this point will most likely see the Swiss Franc longs push the pair toward the 1.2901, a level marked by 20-day SMA. A further move to the downside will most likely see the Swissie take on the greenback defenses around 1.2797, a level established by the October 17 daily low, with sustained momentum seeing the pair take on the greenback bids around 1.2703, a level established by the 23.6 Fib of the 1.1492-1.3085 USD rally. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver.

Key Levels & Technical Indicators

USD/CAD - Canadian dollar bulls once again managed to push the US dollar counterparts below the 1.1800 handle as the tug-of-war between the neighbors continued with the price action remaining confined to a narrow trading range. As the greenback longs manage to take back the control of the pair, the next move above the 1.1800 figure will most likely see US dollar longs take on 1.1862, a level marked by the 23.6 Fib of the 1.2730-1.1592 CAD rally, which is further reinforced by the 50-day SMA at 1.1836. A sustained momentum the upside will most likely see the greenback take on the Loonie defenses around 1.2028, a 38.2 Fib of the 1.2730-1.1592 CAD rally. 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 bulls managed to push back the greenback longs as the pair head back up toward the psychologically important .7500 handle following the inability by the US dollar counterparts to push the pair below. .7457, an Aussie defensive position established by the August 31 daily low. A sustained momentum on the part of the Australian dollar longs will most likely see the pair head above the .7500 and take on the US dollar defenses around .7555, a level marked by the October 5 daily low. However a reversal and move to the downside most likely see the greenback longs push their way toward .7368, a level marked by the 2005 Low. Indicators are favoring the US dollar bulls with both momentum indicator and MACD below the zero line while neutral oscillator give either side enough room to maneuver.

Key Levels & Technical Indicators

NZD/USD - New Zealand dollar bulls continued to do nothing as the pair remained in an extremely tight trading range as the Kiwi longs repeatedly failed to break the greenback defenses around .6883, a level marked by the 38.2 Fib of the .7468-.6681 USD rally. As the price action switches sides in favor of the US dollar longs, a move to the downside will most like see the greenback 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 sustained momentum on the part of the greenback longs will most likely see the pair test the 2005 low at .6685. Indicators are diverging with momentum indicator above the zero line while negative MACD is sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

Key Levels & Technical Indicators

Sam Shenker is a Technical Currency Analyst for FXCM.