Technical Overview

• Euro Goes Nowhere
• Japanese Yen Tries To Keep Below 117.00
• Canadian Dollar Bounces Around 1.1800

Traders Corner
As a trader one of the hardest lessons I learned is humility and how to be humble when trading the market. When the trader becomes successful he or she feels invulnerable that is when the market will remind you who you are. The best trade sometimes is the one not taken. The best thing to do sometimes is too walk away. Always be humble, no matter if you are running a $10,000 mini account and a multi-billion dollar hedge fund, the market will take your money equally, it does not discriminate. As a trader I always treat the market with respect, because if you respect and listen to the market it will give you the answers that you seek, always remember that in a market you are alone, its only you and the market no matter what happens the market is always right, it's the trader who can be on the wrong side of it. Learn humility and be humble, respect and listen to the market and in turn you will be a successful trader, but never let success go into your head because the market will punish you for your arrogance and always be thankful for the lessons the market teaches you, no matter what the price is. Please feel free to email me at sshenker@fxcm.com with your comments. 

EUR/USD - Euro bulls continued to hold the pair above the psychologically important 1.2000 handle as pair remained in a tight trading range. As greenback longs try reestablish their dominance and a break below the psychologically important 1.2000 figure will most likely see the dollar bulls aim for 1.1866, a level marked by the 2005 Low, with a further move to the downside seeing the dollar longs take on the 1.1760, a 2004 low. A break below the 1.1700 level will most likely see the market confirm the dollar dominated trend with greenback longs aiming toward 1.1546, a level established by the October 17, 2003 daily low and a gateway toward the psychologically important 1.1500 handle. Indicators are favoring 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 continued to keep the pair below the 117.00 handle as a break above  will most likely see the greenback longs take on the yen defenses around 117.70, a level established by the September 15, 2003, with a break to the upside seeing the yen retreat toward 118.70, a July 8, 2003 daily high. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 30.11 signaling an existence of a trend not a direction of one, while overbought Stochastic add to the trending outlook.

GBP/USD - British pound bulls managed to push back the dollar longs above the 20-day SMA at 1.7661, after managing to gain an upper hand during the latest clash with the greenback longs. Retaliation by the dollar bulls will most likely see the sterling longs retreat below the psychologically important 1.7500 handle and with a break to the downside seeing the pair take on the pound defenses around 1.7393, a level established by the October 12 daily low. A further break in the sterling's defenses will most likely see the dollar test pound defenses around 1.7284. a level marked by the 2005 low Indicators are diverging with momentum indicator above the zero line, while the negative MACD is sloping upward toward the zero line, while overbought Stochastic gives the dollar bulls a chance to retaliate.

USD/CHF - Swiss Franc longs managed to follow through with a counterattack as they pushed the pair below the 1.2800 figure, but lost momentum above 1.2750, a 50-day SMA. A counterattack by the dollar bulls will most likely see the pair head above the 1.2900 level and aim toward the psychologically important 1.3000 handle thus breaking above the Swissie defenses around 1.2960, a level established by the October 21 daily high, with a break above the 1.3000 figure most likely seeing the pair head toward the 1.3081 a 2005 high. A further collapse of the Swiss Franc defenses will most likely see the dollar longs test 1.3226, a level established by the April 26, 2004 daily high. 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 once again retreated toward the 1.1857, a level marked by the 23.6 Fib of the 1.2730-1.1592 CAD rally after the US dollar counterparts managed to push the pair back above the 1.1800 figure. A further move to the upside and a break of the Loonie defenses around 1.1857  will most likely see the pair head toward the 1.2027, a level established by the 38.2 Fib of the 1.2730-1.1592 CAD rally, thus seeing the Loonie bulls give up the control to the psychologically important 1.2000 handle. A further collapse of the Canadian dollar defenses will most likely see the greenback take on the Loonie offers around 1.2159, a 50.0 Fib of the 1.2730-1.1592 CAD rally.  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.

AUD/USD - Australian dollar bulls managed to hold on to the .7400 handle after continuously retreating under the greenback onslaught.  A further move to the downside will most likely see the pair head toward the .7368, a level marked by the 2005 low, with a further move to the downside seeing the US dollar take on the Aussie defenses .7286, a level established by the September 30, 2004 high. Indicators are diverging with momentum. Indicators are favoring US dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the Australian dollar longs a chance to retaliate.

NZD/USD - New Zealand dollar bulls managed to temporarily halt the plucking the Kiwi longs received at the hands of the US dollar bulls with the pair stalling its descent above the .6930, a level established by the October 19 daily low. A sustained momentum on the part of the US dollar longs will most likely see the New Zealand dollar retreat toward .6868, a 23.6 Fib of the .7468-.6681 USD rally, with a further move to the downside most likely seeing the greenback longs break the .6800 figure and test the New Zealand dollar defenses around .6773, a level established by July 28 daily low. Indicators are supportive of the New Zealand dollar longs with both momentum indicator and MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver.

Sam Shenker is a Technical Currency Analyst for FXCM.