EUR/USD â�,�“ The EURUSD has slipped below the 12/11 low of 1.3126, bringing forward the possibility that the pair is headed towards the 38.2% fibo of 1.2483-1.3367 at 1.3029.  A steep potential supporting trendline, drawn off of the 10/24 and 11/27 lows, is at 1.3029 today.  Bolstering the bearish case is the EURUSD below the 20 day SMA for the first time since 10/25.  On the other hand, the pair could bottom out near 1.3052 â�,�“ the decline from 1.3292 would equal the 1.3367-1.3126 decline at 1.3052 (a classic a-b-c correction).  There is little confidence in direction at the current juncture due to the possibility of a bottom nearby and the break below 1.3126.

USD/JPY â�,�“ The USDJPY has blown by the 61.85 of 119.87-114.42 at 117.78 and focus is now on the 11/9 high at 118.58.  The inverse head and shoulders pattern discussed earlier in the week continues to take shape.  â�,��"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).â�,�  The 12/14 low at 117.25 is initial support.   

GBP/USD â�,�“ Cable is quietly slipping â�,�“ although the pair is holding up better than the EURUSD.  The break below a short term (1 month) supporting trendline today favors continues weakness and a test of the 12/11 low at 1.9464.  The longer term turn signals remain valid â�,�“ that is, RSI crossing below 70 and CCI crossing below 100.  If 1.9464 is given, then support would come in at the 50% fibo of 1.8834-1.9847 at 1.9341.  The upside pivot is the 12/13 high at 1.9727.  A cautious bearish bias is warranted due to the break of the short term trendline.

USD/CHF â�,�“ The USDCHF has distanced itself from the 38.2% of 1.2537-1.1878 at 1.1878 and the pair is approaching the 50% fibo at 1.2208 (the 11/23 low at 1.2206 and former chart congestion reinforces resistance).  The pair closed above the 20 day SMA yesterday for the first time since 10/25 â�,�“ indicating a medium term shift in trend.  Overbought RSI on the 240 minute (dealer) chart combined with the 3 wave structure of the advance from 1.1878 may serve to limit gains but only a decline below 1.2097instills confidence in a bearish scenario.  

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.  The bearish case is reinforced by the break below .7811 / supporting trendline drawn off of the 10/12, 11/14, and 12/14 lows as well as CCI declining through 0.

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.