Technical Overview

• Euro Touches 1.2100
• British Pound Bounces Of 1.7800
• Swiss Franc Tests Bids Below 1.2800

Trader's Outlook
Dollar retreating across the board, its was a fairly large move for the intra-day players, but the money is not made overnight or in this case intraday, In order to make more while risking less this trader has adopted a longer term view of the market and sometimes the best trade is not to have one at all. I shall remain on the sidelines as I choose not to trade the retrace just to confirm my previous observations, but will be ready to long the dollar when the time is right for plucking the overripe majors that are ready t o fall.

EUR/USD - Euro bulls managed to push their way above the psychologically important 1.2000 handle during the latest attack launched by the majors against the greenback. A retrace will most likely be nothing but a prelude to the further move to the upside with the pair heading higher and taking on the greenback defenses around 1.2100 handle, with sustained momentum to the upside encountering an October 17 high at 1.2122. A break to the upside will most likely see the euro longs push their way above the 1.2161, a 50-day SMA and test the dollar defenses around 1.2253, a 23.6 Fib of the 1.3477-1.1869 USD rally. Indicators are favoring the dollar longs with both momentum indicator and negative MACD below the zero line, while neutral oscillators give either side enough room to maneuver.

USD/JPY - Japanese Yen longs took a brief trip below the 115.00 handle only to be shoved back up by the dollar longs with the pair heading toward the 116.00 handle. A move below the psychologically important 115.00 handle will most likely see the pair head lower and test the greenback defenses around 114.51, a level established by the 20-day SMA. A further move to the downside will most likely see the pair head toward the 113.20, a level marked by the 23.6 Fib of the 104.17-115.99 USD rally. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 25.62 signaling an existence of a trend not a direction of one, while overbought Stochastic gives the yen longs a chance to retaliate.

GBP/USD - British pound bulls managed to push the greenback above the 1.7725, a level marked by the 23.6 Fib of the 1.9219-1.7284 USD rally as the sterling longs decided to take the price action into their own hands and pushed the pair higher, only to encounter greenback defenses around 1.7820, a level marked by the August 31 daily high. A further move to the upside will most likely see the pound longs taking on the psychologically important 1.8000 handle, and with a break above taking on the dollar defenses seen around 1.8017, a 38.2 Fib of the 1.9219-1.7284 USD rally.  Indicators are diverging with momentum indicator above the zero line, while the negative MACD is sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CHF - Swiss Franc longs managed to gain momentum to the downside as the greenback longs retreated below the 1.2800 handle with the Swissie bulls breaking the dollar defenses around 1.2797, a level established by the October 17 daily low. A sustained momentum on the part of the Swissie longs most likely 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. A further move to the downside will most likely see the pair head lower and test the greenback defenses around 1.2535, a level marked by the September 14, daily high, which currently acts as a gateway toward the psychologically important 1.2500 figure. Indicators are diverging with momentum indicator below the zero line, while the positive MACD is sloping downward toward the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CAD - Canadian dollar bulls surprised everyone with a show of force as they pushed the pair below the 1.1800 handle. However any prospective Loonie bull should not expect a sharp move to the downside as the pair will most likely slow its descent around the 1.1686, a level marked by the October 12 daily low, with 1.1594, a 2005 low ready to defend the US dollar territory against the Canadian dollar bulls in case the first line of the greenback defenses fails to hold. A reversal from these levels will most likely see the pair head back up toward the 1.1857, a level marked by the 23.6 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.

AUD/USD -  Australian dollar bulls finished dancing around the psychologically important .7500 handle and pushed the pair above the .7513, a level marked by the 23.6 Fib of the.7991-.7374 USD rally. A sustained momentum on the part of the Australian dollar longs will most likely see the pair take on the US dollar defenses around .7604, a 38.2 Fib of the .7991-.7374 USD rally, thus breaking above the 50-day SMA at .7589. A further move to the upside will most likely see the Aussie bulls head higher and test the greenback defenses around .7678, a level established by the 50.0 Fib of the.7991-.7374 USD rally 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.

NZD/USD - New Zealand dollar bulls saw their advance stall the after they managed to push the pair above the psychologically important .7000 handle. A further move to the upside will most likely see Kiwi bulls lose their footing as the pair will most likely bounce off the .7075, a US dollar defensive position established by the 50.0 Fib of the .7498-.6681 USD rally. A reversal will most likely see the pair tumble below the .7000 figure and head toward the Kiwi's defenses around .6868, a 23.6 Fib of the .7498-.6681 USD rally. Indicators are supportive of the New Zealand dollar longs with both momentum indicator and MACD treading above the zero line, while overbought Stochastic gives the US dollar longs a chance to retaliate.

Sam Shenker is a Technical Currency Analyst for FXCM.