EUR/USD – Euro bulls continued to head lower after the greenback longs managed to launch a counterattack, which pushed the pair below the 1.1700 handle. A further move to the downside will most likely see the euro retreat further and with a break of the single currency defenses around 1.1686, a level established by the November 22 daily low, will most likely see the pair tumble below the 1.1600 level and take on the euro’s bids around 1.1546, an October 17, 2003 daily low and a gateway toward the psychologically important 1.1500 handle. A sustained momentum on the part of the greenback longs will most likely see the pair head deeper below the 1.1500 figure and with a break of the 1.1400 level testing the single currency defenses around 1.1379, a level marked by the November 7, 2003 daily low. 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/JPY – Japanese Yen longs continued to give up more territory to the advancing greenback longs after failing to gain momentum below the 119.00 handle. A sustained breakout to the upside will most likely see the dollar bulls push the pair above the psychologically important 120.00 handle, and force the Japanese yen bull to retreat higher toward the 120.72, a level marked by the August 1, 2003 daily high. A further collapse of the yen defenses will most likely see the greenback longs make their way toward 121.92, a level established by the March 24, 2003 daily high. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 41.41 signaling an existence of a maturing trend, not a direction of one, while overbought RSI adds to a trending outlook.

GBP/USD – British pound bulls once again tumbled below the 1.7100 handle after the cable longs failed to reestablish their dominance over the price action. As dollar bulls continue their unrelenting advance, a further move to the downside will most likely see the cable longs retreat below the psychologically important 1.7000 handle, and with a further collapse of the sterling defenses most likely seeing the pair head toward the pound bids around 1.6877, a level marked by the November 26, 2003 daily low. A further collapse of the sterling defenses will most likely see the greenback longs target the pound bids around 1.6568, a level established by the November 7, 2003 daily low, which currently acts as a gateway toward the 1.6500 handle. Indicators are favoring dollar longs with both momentum indicator and negative MACD below the zero line, while oversold Stochastic gives the sterling longs a chance to retaliate.

USD/CHF – Swiss Franc longs continued to retreat with greenback bulls pushing the pair toward 1.3285, the most recent 2005 high. A further break to the upside will most likely see the pair head higher and take on the Swiss Franc offers around 1.3389, a level established by the October 3, 2003 daily high, breaking of which will most likely open the psychologically important 1.3500 handle as a target of opportunity for prospective greenback longs. A collapse of the 1.3500 figure will most likely see the dollar bull’s test the Swissie’s defenses around 1.3525, a level established by the September 29, 2003 daily high. Indicators remain in favor of the dollar longs with both momentum indicator and positive MACD above the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CAD – Canadian dollar bulls remained on a warpath as the price action stalled around the 1.1700 handle as neither side managed to gain an upper hand. As the USD/CAD revolves around the 1.1700 handle, the next move to the downside will most likely see the Loonie longs test the greenback defenses around 1.1643, a level established by the October 27 daily low. A subsequent reversal will most likely see the pair head above the 1.1700 figure and with sustained momentum on the part of the US dollar longs seeing the Canadian dollar try to mount a counterattack around 1.1857, a level established by the 23.6 Fib of the 1.2730-1.1592 CAD rally. Indicators are diverging with momentum indicator below the zero line and positive MACD sloping downward toward the zero line, while neutral oscillators give either side enough room to maneuver.

AUD/USD – Australian dollar bulls continued to head south after their latest counterattack failed to break through the US dollar defenses around .7385, a level established by the 23.6 fib of the .7798-7267 USD rally. As greenback bulls reestablish their dominance and push the pair toward the .7300 handle, a break below will most likely see the pair test the Australian dollar bids around .7263, a level marked by the most recent 2005 Low. A further collapse of the Australian dollar defenses will most likely see the greenback longs take on the Aussie defenses around .7224, a level established by the October 19, 2004 daily low. Indicators are signaling trending conditions with ADX above 25 at 26.56, signaling an existence of a trend, not a direction of one, while both momentum indicator and negative MACD remain below the zero line, with neutral oscillators giving either side enough room to maneuver.

NZD/USD – New Zealand dollar bulls saw the momentum of their advance wane into nothingness after they had failed to push the pair above the .6950 level. A counterattack by the greenback bulls will most likely see the pair head lower and with a break below the .6900 handle, seeing the greenback longs test the Kiwi’s defenses around .6870, a level established by the 23.6 Fib of the .7468-.6681 USD rally. A further break below will most likely see the New Zealand dollar retreat toward the next line of defenses around .6773, a level established by the November 15 daily low. Indicators are diverging with momentum indicator above the zero line and negative MACD sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

Sam Shenker is a Technical Currency Analyst for FXCM.