Technical Overview

• British Pound Bounces Around 1.7400
• Japanese Yen Head Above 118.00
• Australian Dollar See-Saws Around .7300

Traders Corner
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EUR/USD - Euro bulls had their horns handed back to them by the advancing dollar longs after the greenback longs pushed the pair below the 1.1700 handle. A further move to the downside will most likely see the dollar longs take on 1.1653, a level marked by October 22 daily low, and with sustained momentum seeing the greenback taking on the single currency defenses around 1.1546, a level established by the October 17, 2003 daily low and a gateway toward the psychologically important 1.1500 handle. A break below the 1.1500 figure will most likely see the pair head toward the 1.1379, a level established by the November 7, 2003 daily low, at which point the dollar longs will most likely consolidate their gains before continuing their onslaught. Indicators are favoring dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the euro bulls a chance to retaliate.

USD/JPY - Japanese Yen longs once again found themselves above the 118.00 handle after the surprise attack by the dollar longs. As the pair remains in a tight trading range a move to the downside will most likely see the yen longs make their way toward the 117.00 and with break to the downside aiming for the dollar bids around 116.24, a level marked by the October 27 daily high. A further move to the downside will most likely see the momentum of the yen bulls stall below the psychologically important 115.00 figure around 114.62, a level established by the October 25 daily low. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 37.29 signaling an existence of a maturing trend not a direction of one, while overbought Stochastic adds to the trending outlook.

GBP/USD - British pound bulls found themselves under pressure as greenback longs began stretching cable's defenses as the pair once again headed below the 1.7400 handle. A further move to the upside will most likely see the pair tumble toward the 2005 Low at 1.7284, and with a break below target the sterling bids around 1.7086, a level marked by the November 20, 2003 daily high. A further move to the downside will most likely see the pair head toward the psychologically important 1.7000 handle and with a break to the downside taking on the pound defenses at 1.6877, a level established by the November 28, 2003 daily low. 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/CHF - Swiss Franc longs found themselves above the 1.3100 handle starring at he 1.3200 figure, a level not seen since 2004. As the Swissie longs try to push the pair back below the 1.3100 figure and try to recapture previously lost territory, a move to the downside will most likely see the Swiss Franc bulls push their way below the 1.3000 figure and aim toward the 1.2919, a 20-day SMA. A reversal from these levels will most likely see the pair head back up above the 1.3000 figure and target the 2005 high. Indicators are favoring dollar longs with both momentum indicator and positive MACD above the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CAD - Canadian dollar bulls continued to see-saw around the 1.1900 handle as the price action remained non-existent. As greenback longs prepare for another offensive against the Loonie longs a move to the upside 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 favoring dollar longs with both momentum indicator and positive MACD above the zero line, while neutral oscillators give either side enough room to maneuver.

AUD/USD - Australian dollar bulls failed to gain the momentum to the upside and once again tumbled towards the .7300 handle. As US dollar longs resume their advance, a further move to the downside will most likely the greenback bulls take on the Aussie defenses .7286, a level established by the September 30, 2004 high, with a further move to the downside most likely seeing the pair tumble toward .7224, a level marked by the October 19, 2004 daily low. Indicators are diverging with momentum.  Indicators are favoring dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the Aussie bulls a chance to retaliate.

NZD/USD - New Zealand dollar bulls failed to recapture the .6900 handle following the unsuccessful bid to reestablish their dominance over the price action. As Kiwi longs continue to fly south, a further move to the downside will most likely see the pair head below the .6800 handle and with a break to the downside taking on the New Zealand dollar defenses around .6773, a level established by the July 28 daily low.  Indicators are favoring the US dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the Aussie bulls a chance to retaliate.

Sam Shenker is a Technical Currency Analyst for FXCM.