Technical Overview

• Euro Keeps 1.1700
• Swiss Franc Eyes 1.3000
• Canadian Dollar Pushes Below 1.1900

Traders Corner
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EUR/USD - Euro bulls continued to bounce in a tight trading range as the price action remained subdued after the pair established a new 2005 Low at 1.1675. A move to the downside will most likely see the dollar longs once again push the pair below the 1.1700 handle and take on the euro defenses around 1.1653, a level marked by October 22 daily low. A sustained momentum to the downside will most likely see the greenback taking on the single currency defenses around 1.1546, a level established by the October 17, 2003 daily low and a gateway toward the psychologically important 1.1500 handle. A break below the 1.1500 figure will most likely see the pair head toward the 1.1379, a level established by the November 7, 2003 daily low, at which point the dollar longs will most likely consolidate their gains before continuing their advance. Indicators are favoring dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the euro bulls a chance to retaliate.

USD/JPY -  Japanese Yen longs remained in a range that dominated the price since last week as neither side managed to gain an upper hand and continued to engage in a staring contest.. As the pair continues to bounce in a 117.00-118.50 range, a move to the downside will most likely see the yen longs make their way toward the 117.00 and with break to the downside aiming for the dollar bids around 116.24, a level marked by the October 27 daily high. A further move to the downside will most likely see the momentum of the yen bulls stall below the psychologically important 115.00 figure around 114.62, a level established by the October 25 daily low. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 37.95 signaling an existence of a maturing trend not a direction of one, while overbought Stochastic adds to the trending outlook.

GBP/USD - British pound bulls managed to keep the pair above the 1.7400 figure and did not waste anytime in pushing the pair higher. A further move to the upside will most likely see the sterling longs make their way above the psychologically important 1.7500 handle and test the dollar offers around 1.7615, a level established by the 20-day SMA. A subsequent reversal will most likely see the pair tumble through the 1.7500 level and aim for the 2005 Low at 1.7284, and with a break below target the sterling bids around 1.7086, a level marked by the November 20, 2003 daily high. Indicators are favoring dollar longs with both momentum indicator and negative MACD below the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CHF - Swiss Franc longs managed to keep the pair below the 1.3200 figure and pushed the pushed back the advancing greenback longs as the pair once again headed below the 1.3100 figure. A further move to the downside will most likely see the Swiss Franc bulls push their way below the 1.3000 figure and aim toward the 1.2943, a 20-day SMA. A reversal from these levels will most likely see the pair head back up above the 1.3000 figure and target the 2005 high. Indicators are favoring dollar longs with both momentum indicator and positive MACD above the zero line, while overbought Stochastic gives the Swissie longs a chance to retaliate.

USD/CAD - Canadian dollar bulls once again decided to press their luck and pushed the pair below the 1.1900 in an attempt to capture the US dollar defenses around 1.1857, a level marked by the 23.6 Fib of the 1.2730-1.1592 CAD rally. A retaliating by the greenback longs will most likely see the pair head toward the 1.2027, a level established by the 38.2 Fib of the 1.2730-1.1592 CAD rally, thus seeing the Loonie bulls give up the control to the psychologically important 1.2000 handle. A further collapse of the Canadian dollar defenses will most likely see the greenback take on the Loonie offers around 1.2159, a 50.0 Fib of the 1.2730-1.1592 CAD rally. Indicators are favoring dollar longs with both momentum indicator and positive MACD above the zero line, while neutral oscillators give either side enough room to maneuver.

AUD/USD - Australian dollar bulls continued to push the pair higher toward the US dollar defenses around .7420, a level marked by the 23.6 Fib of the .7798-.7287 USD rally, following the inability by the greenback longs to push the pair below the .7300 handle. A move toward the .7420 will most likely see the Aussie bulls lose their footing and tumble back down toward their defensive position at .7286, a level established by the September 30, 2004 high, with a further move to the downside most likely seeing the pair tumble toward .7224, a level marked by the October 19, 2004 daily low. Indicators are diverging with momentum.  Indicators are favoring dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the Aussie bulls a chance to retaliate.

NZD/USD - New Zealand dollar bulls continued to press their luck as they once again decided to takeover the price action and pushed the pair toward the greenback positions around .6870, a level established by the 23.6 Fib of the .7468-.6681 USD rally. Retaliation on the part of the US dollar longs will most likely see the pair head back down and with a break below the .6800 figure most likely seeing the price action escalate as greenback longs take on the Kiwi bids around 6773, a level established by the July 28 daily low. A further break to the downside will most likely see the pair tumble toward the .6687, a 2005 Low. Indicators are favoring the US dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the Aussie bulls a chance to retaliate.

Sam Shenker is a Technical Currency Analyst for FXCM.