EUR/USD - Euro continued to consolidate in a trading range with dollar longs pushing the pair toward the 1.1700 handle, a level defended by the November 28 daily low at 1.1682. However given an upcoming event risk, a breakout from 1.1700-1.1863 consolidation range will most likely set the tone for the next major move by the EUR/USD. A given a constant rejection of the of the price above the 1.1800 figure, any move toward 1.1863, a level marked by the 23.6 Fib of the 1.2588-1.1639 USD rally might become a prime shorting opportunity for any prospective dollar bulls. A subsequent move to the downside will most likely see the pair break below 1.1682 and target the current 2005 Low at 1.1638, breaking of which will most likely open the psychologically important 1.1500 level as a target of opportunity. Indicators are diverging with positive 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.

USD/JPY - Japanese Yen finally saw the collapse of the 120.00 handle as the pair remains in a trend, which so far retraced more than 50 percent of the 2002-2005 yen rally, which saw the pair rally from 135.00 to 101.00. Given continuing momentum on the part of the dollar bulls, a further move to the upside and a break above 121.00 figure will most likely see the pair test the offers around the 121.92, a level marked by the March 24, 2003. A sustained momentum to the upside will most likely see the pair aim for the 123.08, a significant level marked by the 1.50 Fib Extension of the May-July 900 pip USD rally. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 38.47 signaling an existence of a trend, not a direction of one, while both overbought RSI and Stochastic add to the trending outlook.

GBP/USD - British pound continues to trade within 1.7048-1.7349 consolidation range as lack of momentum and an upcoming event risk combined for a quiet trading session. As volatility pickup once again and the price begins to gather momentum, the next move to the downside will most likely see the pair head lower and break through the 1.7139, a level established by the November 16 daily low. A further move to the downside will most likely see the dollar traders sweep clean the short term pound stops as the pair collapses toward the 1.7048, the most recent 2005 low and a gateway toward the psychologically important 1.7000 handle. Indicators remain in favor of greenback bulls 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 continues to engage the dollar longs below the 1.3200 handle as the pair remains confined to a 1.3000-1.3285 trading range that dominated the price action the beginning of November. An upcoming move to the upside coupled with an explosion of volatility will most likely see the Swiss Franc retreat above 1.3289, a 2005 High and the range's upper boundary, which will give the dollar traders the confirmation that the momentum to the upside has resumed and the next target of opportunity is 1.3389, a level created by the October 3, 2003 daily high. A further collapse of the Swiss Franc defenses will most likely see the 1.3500 become a target of opportunity for the prospective dollar longs. 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 gave both sides a run for their money as the pair took a brief trip above the 1.1700 handle only to reverse direction and collapse back down thus establishing a high wave candle, which raises cautionary flag as the setup is a precursor for an upcoming major move. Given the inability by the Loonie bulls to push the pair below 1.1643, a level marked by the October 27 daily low, the next move to the upside will most likely see the Canadian dollar give up the 1.1700 figure and head toward 1.1773, a 50-day SMA, which is further supported by the 20-day SMA at 1.1797. Given the combination of SMA's below the 1.1800 handle makes the level a strong point of resistance as most of the short-term Canadian dollar traders placed their stops right above 1.1857, a 23.6 Fib of the 1.2730-1.1592 CAD rally, breaking of which will most likely see the upside momentum accelerate as Loonie bulls cover their USD/CAD shorts.  Indicators are favoring of the Canadian dollar longs with both momentum indicator and negative MACD below the zero line, while extremely oversold Stochastic gives the US dollar bulls a chance to retaliate.

AUD/USD - Australian dollar continued to push the pair higher above the .7400 handle as the pair found a temporary support around .7385, a level established by the 23.6 Fib of the .7798-.7267 USD rally. A further move to the upside will most likely be limited by the US dollar offers around .7457, a level marked by the 38.2 Fib of the .7798-.7267 USD rally and is further reinforced by the 50-day SMA. A reversal will most likely see the pair head below the .7400 level and with collapse of .7383 most likely seeing the pair accelerate to the downside as Aussie traders scramble to cover their shorts. Indicators are diverging with positive momentum indicator above the zero line and negative MACD below the zero line, while neutral oscillators give either side enough room to maneuver.

NZD/USD - New Zealand dollar finally managed to push above the 20-day SMA and continued to head to the upside only to encounter greenback offers around .7076, a level established by the 50 Fib of the .7468-6681 USD rally, which is further reinforced by the potential quadruple top, thus giving the greenback longs plenty of ammunition to sell into any volatility spikes as any potential breakouts will most likely become fakeouts as the level once again rejects the price. A subsequent reversal from there levels will most likely see the US dollar traders push the pair toward the psychologically important .7000 handle, and with a break below challenging the Kiwi's bids around .6984, a level established by the 38.2 Fib of the .7468-6681 USD rally. Indicators are diverging with momentum indicator above the zero line and negative MACD sloping upward toward the zero line, while overbought Stochastic gives the US dollar bulls a chance to retaliate.

Sam Shenker is a Technical Currency Analyst for FXCM.