EUR/USD - Euro remains confined to a narrow 1.1700-1.1863 consolidation range and is beginning to flash warning signals of a potential move to the downside. A move below the 1.1700 handle will most likely see the pair head lower and most likely build momentum as the short-term stops strategically placed below the 1.1700 figure will most likely add to the overall momentum and see the pair accelerate toward 1.1639, the most recent 2005 low. A collapse of the level of such significance will most likely see the pair head lower and test the euro's bids around 1.1546, an October 17, 2003 daily low, and a gateway toward the psychologically important 1.1500 handle. Indicators are mixed with positive momentum 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 remains in a trend mode, but is beginning to show signs of a potential deterioration as the pair continues to reject the offers above 121.00 handle. As the pair remains above the psychologically important 120.00 handle, any potential weakness might signal a prime shorting opportunity with a close below the 120.00 figure issuing a confirming signal that the pair is exhausting the trend that stated at 109.00. A confirmed break below 120.00 level will most likely see the yen longs add to their existing positions and pus the pair toward 119.24, a level established by the November 30 daily low, thus seeing the yen trader sweep clean the greenback stops placed below the 120.00 figure. Indicators remain supportive of the dollar longs with both momentum indicator and MACD treading above the zero line, with ADX above 25 at 40.43 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 bulls once again failed to gain momentum above the 1.7400 handle and tumbled back below 1.7390, a 23.6 Fib of the 1.8500-1.7048 USD rally. As greenback longs gear up and push the sterling toward below the 1.7300 figure, a break below will most likely see the pair accelerate to the downside due to the protective stops placed that were placed by the pound bulls below the 1.7300 handle. A sustained momentum to the downside will most likely see the pair break below 1.7249, a level established by the December 2 daily low and is further reinforced by the 20-day SMA. A collapse of the sterling bids will most likely see the rally extend below 1.7200 figure, which might see the dollar traders take on the bids around 1.7139, a level established by the November 16 daily low. Indicators are mixed with positive momentum above the zero line and negative MACD sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CHF - Swiss Franc bulls saw the futility of their cause as the pair once again failed to break below the 1.3040, a level marked by the 23.6 Fib of the 1.2240-1.3285 USD rally, thus leaving a doji in the wake of yesterday's price action. A reversal from these levels and a retreat above 1.3100 figure will most likely see the pair head higher and challenge the Swissie offers around 1.3237, a level established by the November 28 daily high. A further move to the upside will most likely see the pair head higher and break above the 1.3000-1.3285 trading range that dominated the price action the beginning of November. A sustained momentum following the break will most likely see the pair head higher and aim for the offers around 1.3389, a level created by the October 3, 2003 daily high. Indicators are mixed with positive momentum above the zero line and negative MACD sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CAD - Canadian dollar finally began giving up the territory below the 1.1600 handle after sweeping the cleaning the greenback stops strategically placed below the figure. As the price action reverses direction and begins to favor the US dollar traders, a sustained momentum on the part of the greenback longs will most likely see the pair head higher and test the Loonie bids around 1.1686, a level marked by the October 12 daily low. A break above will most likely see the pair head above the 1.1700 level and sweep the stops placed above the figure thus adding to upside momentum with greenback traders aiming for the Canadian dollar offers around 1.1803, a level established by the November 10 daily low and is protected by the combination of the 20-day and 50-day SMA around the 1.1750-60 zone. Indicators are favoring of the Canadian dollar longs with both momentum indicator and negative MACD below the zero line, while oversold both Stochastic gives the US dollar bulls a chance to retaliate.

AUD/USD - Australian dollar failed to keep the psychologically important .7500 handle and tumbled back down toward .7456, a level established by the 38.2 Fib of the .7798-.7267 USD rally and is reinforced by the 50- day SMA. A further move on the part of the greenback traders will most likely see the pair head below .7400 figure and test the Aussie bids around .7383, a level marked by 23.6 Fib of the .7798-.7267 USD rally. A sustained momentum to the downside will most likely see additional US dollar traders coming in into the market, which would add to the overall momentum, as they push the pair lower toward .7321, a level established by the November 28 daily low. Indicators are diverging with positive momentum indicator above the zero line and negative MACD below the zero line, while ADX is above 25 at 25.79 signaling trending conditions, with neutral oscillators giving either side enough room to maneuver.

NZD/USD - New Zealand dollar traders grew even bolder as Kiwi lost a number of feathers following a sharp correction, which knocked the pair below .7077, a level marked by the 50.0 Fib of the .7468-6681 USD rally. A further move to the downside will most likely see the pair tumble further and head below the psychologically important .7000 handle, and test Kiwi's bids around .6984, a level established by the 38.2 Fib of the .7468-.6681 USD rally. A sustained momentum to the downside will most likely see the pair head lower and test the bids around .6930, a level established by the October 19 daily low and is further reinforced by the combination of the 20-day and 50-day SMA's at .6960. Indicators are supporting the New Zealand dollar longs with both the momentum indicator and positive MACD above the zero line, while ADX above 25 at 25.75 signals an existence of a trend, not a direction of one with overbought Stochastic giving the US dollar traders a chance to push the pair lower.

Sam Shenker is a Technical Currency Analyst for FXCM.