EUR/USD ââ,¬â€œ EUR/USD has completed its double bottom bounce off the 1.3050 and has climbed 150 points in the past 36 hours to challenge the first of a series of swing highs made in its initial climb to 1.3350. The first area of resistance lies at the 1.3250 followed by the next zone at 1.3300 and finally by swing high at 1.3350.  With MACD turning negative the possibility of the pair breaking through all three ceilings remains remote.  Nevertheless the EUR/USD appears to have completed its intermediate term retracement and after a period of consolidation on the hourlies may well challenge yearly highs before the end of 2006

USD/JPY ââ,¬â€œ The USDJPY continues to be hemmed in by the massive resistance at the 118.50 level as the pair churns in one of the narrowest channels in recent memory. Typically the resolution of this compressed volatility action serves as an excellent forecaster of future directionality. Therefore, should the pair break above the 118.50 ceiling it may target the 119.87 high  of 10/13. On the other hand a hard break below the 118.00 could well lead the pair lower to retest the recent lows below the 115.00 figure. Thus given these compressed conditions a breakout in either direction could be a potent signal.

GBP/USD ââ,¬â€œ Having formed a classic pennant formation on the daily cable looks ready to challenge its yearly highs above the 1.9800 figure with the ultimate goal of  targeting the psychologically critical 2.0000 level later on. The rate of change in  MACD has turned positive suggesting that sterling has plenty of fuel to propel higher. Only a break of the swing lows set 12/18/06 at 1.9434 negates the bullish thesis in the pair.

USD/CHF ââ,¬â€œ Having tagged and been rejected at the 38.2% fibo of the 10/03/06 -12/05/06 run from  1.2773 to 1.9000, USD/CHF appears set for a double bottom retest of the 12/05/06 lows of 1.9000  However, a move and close on the dailies above the 1.2250 level  would open the way to the test of the 50% fibo at 1.2339.

USD/CAD ââ,¬â€œ USD/CAD broke its uptrend by falling through the 200 SMA on the hourly and then failing on the retest of the long term moving average a few hour later. With price action now decidedly bearish for the pair the next target for USD/CAD shorts is the 1.1457 low set on 12/10/06

AUD/USD ââ,¬â€œ After having made a double bottom on the hourlies at 7790 the Aussie has regained strength trading above the 20 SMA as it consolidates at the 7850 level. The next move higher targets the 7890 swing high set on 12/13/06 just below the important 7900 level which the pair was unable to over come on the first attempt higher. A break below the near term hammer at 7820 negates the bullish view and suggests yet another retest of recent lows at 7790

NZD/USD ââ,¬â€œ To see the power of the recent  Kiwi move weââ,¬â"¢ve scaled out to the three year chart as the unit broke through the swing high resistance from 2/03/06 and now looks to challenge the 7000 level. However, with momentum waning as signaled by the declining MACD the retest of the 7000 level may well hit resistance as the pair consolidates its recent gains.

Jamie Saettele is a Technical Currency Analyst for FXCM.