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.  Immediate downside risk increases on a break below 1.3190 (yesterdayâ�,��"�s low and the 61.8% of 1.3126-1.3291).  Scope would then shift to the 12/11 low at 1.3126, which needs to hold as support for the larger bullish pattern to remain intact.

USD/JPY â�,�“ The USDJPY has separated from the 50% of 119.87-114.42 at 117.13 and focus in now on the 61.8% at 117.78.  Chart congestion provides resistance until the 11/9 high at 118.58.  In the shorter term, the pair looks like it is tracing out a 5th wave of a 5 wave bullish sequence that began at 114.42.  What would follow next, regardless of the larger trend, is at least a correction lower.  The fibo resistance along with short term bearish divergence suggests that the upside is limited at this point.  A drop below the 12/11 high at 117.24 would suggest that a deeper decline was underway.

 
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, but a deeper corrective decline is possible before a the larger bullish picture plays out.  A decline below 1.9603 brings to the forefront the idea that Cable is tracing out the C wave of a smaller 3 wave (a-b-c) correction.  Support would be placed between the 50% and 61.8% fibos of 1.9464-1.9727 at 1.9565/96.  This short term scenario is illustrated below.  A rally above 1.9727 gives bulls the edge.

USD/CHF â�,�“ The USDCHF has rallied to the 38.2% of 1.2537-1.1878 at 1.2130.  This could be a reversal point in which case we would see a continuation of dollar weakness to complete the 5th wave decline.  Resistance is reinforced by the 20 day SMA at the current juncture.  A push through 1.2130 exposes the confluence of the 50% fibo of 1.2537-1.1878 / 11/23 low at 1.2206/07.

USD/CAD â�,�“ The USDCAD rally has accelerated the past two days but price now faces channel resistance at the current juncture.  Daily oscillators near or at overbought levels along with divergent short term oscillators gives scope to weakness / consolidation.  Initial support is at the 12/8 high at 1.1516.  The next major level of resistance is not until 1.1771.

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�,�  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.  Short term, the Kiwi has gotten hammered, declining below .6900.  A short-term trendline near .6850 keeps the short term bias bullish.  A decline below this line shifts focus to the 12/6 low at .6814.

Jamie Saettele is a Technical Currency Analyst for FXCM.