EUR/USD â�,�“ The EURUSD is little changed after yesterdayâ�,��"�s outside day.  Tight Bollinger bands on the daily indicate breakout potential.  A shorter term triangle (shorter term than the one discussed yesterday) has formed following the 8/10 high at 1.2911.  The apex is at 9/25.  Following the theory that price typically breaks through its triangle two-thirds to three-fourths of the way through the triangle, we would expect a breakout to occur anywhere from 9/11 to 9/15.  With the trend leading up to the triangle up, we maintain a cautious bullish bias.  A test of the lower end of the triangle is certainly possible at 1.2741 to complete 5 waves within the triangle.  A break below there suggests that the triangle was a reversal pattern (rather than continuation).

USD/JPY â�,�“ The USDJPY probes the resisting line from 119.38.  An inverse head and shoulders pattern has formed on the daily but it takes a break above the mentioned trendline to complete the pattern.  In this instance, price probes the 118.87-119.38 zone.  A break below the trendline from the 113.95 low â�,�“ currently at 116.40 â�,�“ is required to suggest that price is headed lower.  Support is at the confluence of the trendline from 113.95 / 8/29 low at 116.49.

GBP/USD â�,�“ Yesterdayâ�,��"�s doji (daily) may be the beginning of the end for bulls.  However, price remains above the 8/16 high of 1.9023, which is a good point of reference (on a daily closing basis).  Daily momentum is picking up as RSI nears 70.  However, it is hard to ignore the bearish divergence with RSI on the hourly at each new high.  A break below former resistance at the 1.9000 figure would begin to suggest that a reversal is in play, but only a break below 1.8775 (nearly 300 pips away) confirms a reversal.  The latest COT readings (little commercial buying and extremely long speculative positioning) may also limit upside potential.

USD/CHF â�,�“ The USDCHF made its outside day as well yesterday.  Volatility has contracted significantly as the pair is nearing the convergence of a resisting trendline from 3/10/2006 (1.3229) and a supporting trendline from 5/15/2006 (1.1919).  The bias is neutral until a break.  Immediate resistance is just above current price at the confluence of the 10 / 20 day SMAs at 1.2325/26.

USD/CAD â�,�“ From the last week â�,��"The 3rd corrective wave (beginning at 1.1319) would equal the first (1.1456-1.1170) at 1.1033.  This is significant because the 78.6% fibo of 1.0927-1.1456 is at 1.1040 (just 7 pips away).  This fits with the notion that initial moves at turning points are often retraced a large amount before a continuation.  The initial move in this case is 1.0927-1.1456.  USDCAD fell to 1.1049 last week and Fridayâ�,��"�s candle is a spinning top at the lower Bollinger band (daily).  The evidence points to a rally from nearby levels.  Additional evidence that a bottom is forming is CCI rising from above -100 in recent days.â�,�  Todayâ�,��"�s low at 1.1028 may be the significant low discussed above.  Wave structure warrants a bullish stance against 1.1028.  A break below would expose 1.0960 and negate the immediate outlook.  1.1128 is initial resistance.

AUD/USD â�,�“ Price has broken above a short term trendline from .7699 and currently tests the same line from the other side as support.  Immediate resistance is at a trendline from.7713 at .7660.  A break above there negates the short term bearish bias.  On the other hand, a short term trendline from .7549 (8/25 low) rests at .7610.  Yesterdayâ�,��"�s low is immediate support at .7608.  It takes a breach of the 8/25 .7549 low to suggest that the trend is down.  Regarding the longer term outlook - OT positioning indicates that AUDUSD may be topping out as the speculative community is extremely long of Australian dollars and commercial hedgers own very little of the currency. 

NZD/USD â�,�“ Kiwi has rallied in what looks like a 5th wave advance that should be followed by a decent sized correction.  That correction may have already started as price has decline roughly 40 pips from todayâ�,��"�s high and hourly RSI is just now dipping below 50.  Initial support is at the 8/16 high at .6439.  A continuation of strength probes .6620 (where wave 3 (.6143-.6439) would equal wave 5 (beginning at .6328)).  Daily RSI is now in overbought territory for the first time since 12/6/2005 â�,�“ when Kiwi topped out at .7198 before embarking on the decline to below .6000.

Jamie Saettele is a Technical Currency Analyst for FXCM.