EUR/USD â�,�“ We are still of the persuasion that the recent decline to 1.3126 was corrective and that it will give way to one more rally (to above 1.3367) to complete the 5 wave bullish sequence from 1.2483 (this would be the 5th of the 5th).  Still, downside risk outweighs upside risk at this point.  Daily oscillators favor a deeper decline with RSI crossing below 70 and CCI crossing below 100. What is important to remember is that major tops almost always sport bearish divergence with oscillators.  One more rally to above 1.3367 would lead to bearish divergence.  A line parallel to the support line drawn off of the 11/15/2005 and 2/27/2006 lows and extended from the 9/2/2005 high provides potential channel resistance.  That line is at 1.3429 today and increases about 2 pips per day

USD/JPY â�,�“ The USDJPY is little changed as it trades near the 50% fibo of 119.87-114.42 at 117.14, just below a resisting trendline drawn off of the 10/24 and 11/17 highs.  The pattern since the 12/5/2005 high at 121.38 has taken on the form of an inverse head and shoulders pattern.  However, a rally through the neckline is required to complete the pattern.  The neckline is drawn off of the 12/5/2005 and 10/13/2005 highs and is near 119.60 today (decreases about 2 pips per day).  Resistance prior to the neckline is at the 78.6% of 119.87-114.42 at 117.78.  Support stems from the 11/30 high at 116.54.

GBP/USD â�,�“ Cable is in the same position as the EURUSD.  That is, the decline from 1.9846 to 1.9464 (the 38.2% of 1.8834-1.9846 is at 1.9460) is likely the 4th wave of the larger 5th wave.  What follows then is the 5th of the 5th, which likely exceeds 1.9846 before a much more pronounced decline takes place.  Fridayâ�,��"�s high at 1.9726 is initial resistance.  A drop below 1.9464 suggests a larger correction is in the works and focus would then shift to the 50% of 1.8834-1.9846 at 1.9339.

USD/CHF â�,�“ The USDCHF has worked higher but failed prior to the 11/29 high at 1.2116 yesterday.  Wave structure is the same as that of the EURUSD and GBPUSD, albeit in the opposite direction.  1.2116 remains resistance and a 5th wave decline would challenge the 12/5 low at 1.1878 and expose the 4/21/2005 low at 1.1739.  Bolstering the bearish case is the reverse hammer candle from Monday.  

USD/CAD â�,�“ The USDCAD rallied above 1.153 resistance but failed to close above the level and since corrected lower.  Price above the support line drawn off of the 9/1 and 10/30 highs keeps the bias a bullish one.  A line parallel to the support line and extended from the 8/18 high at 1.1271 places trendline has held so far.  However, daily oscillators are increasing and not yet overbought â�,�“ suggesting that strength could very well persist.  Significant resistance is not until the 4/3 high at 1.1771.  Initial support is at the 12/8 low at 1.1444.      

AUD/USD â�,�“ We proposed a short term bearish scenario yesterday:  â�,��"The short term double top at .7921/29 along with bearish divergence (daily oscillators) and daily oscillators declining from overbought levels all give scope to further weakness in the Aussie.  A decline below .7811 shifts focus to the 11/1 high at .7766.â�,�  However, the Aussie has looked bid since yesterday and is nearing the 12/8 high at .7929.  A push through .7929 negates implications from the bearish evidence and gives scope to the 2004 high at .8003.

NZD/USD â�,�“ The Kiwi has clustered near the 61.8% of .7463-.5927 between .6814 and .6939.  While RSI has declined from above 70 on the daily, the uptrend remains in place above the trendline drawn off of the 6/28 and 11/15 lows.  That line is at .6694 today and increases about 4 pips per day.

Jamie Saettele is a Technical Currency Analyst for FXCM.