EUR/USD - Euro remains confined to a tight trading range as the single currency gave up the psychologically important 1.2000 handle, a level marked by the 38.2 Fib of the 1.2588-1.1639 USD rally. Following the failure by the euro bulls to gain momentum above the 1.2000 handle, the next move to the downside will most likely see the dollar traders sweep the stops above the 1.1900 figure, which would add to the downside momentum. A sustained momentum to the downside will most likely see the pair head lower and with a move below the 1.1900 handle most likely seeing the dollar traders encountering active euro bids around 1.1840-1.1885 zone, a potential congestion zone created by the combination of the 20-day, 50-day SMA's and the 23.6 Fib of the 1.2588-1.1639 USD rally. A further move to the downside will most likely see the pair break below the 1.1800 figure and target the single currency bids around 1.1776, a level established by December 12 daily low. Indicators are mixed with positive momentum above the zero line and negative MACD sloping upward toward the zero line, while overbought Stochastic gives the dollar bulls a chance to retaliate.

USD/JPY - Japanese Yen traders failed to push the pair lower after encountering active dollar bids above the 116.00 handle and retreated above the 116.50 level. As dollar longs retrace part of the yen rally, the next move to the upside will most likely see the pair break above the 117.00 figure and test the offers around 117.37, a level established by the 23.6 Fib of the 104.16-141.46 USD rally, which is further reinforced by the 50-day SMA at 117.67. A further collapse of the yen offers will most likely see the greenback longs extend their gains above the 118.00 figure and take on the yen defenses around 118.21, a level established by the November 23 daily low. Indicators are diverging with negative momentum indicator below the zero line while positive MACD is sloping downward toward the zero line, with ADX above 25 at 36.73, signaling an existence of a maturing trend, not a direction of one, while neutral oscillators give either side enough room to maneuver.

GBP/USD - British pound traders saw the pair extend its decline toward the 1.7605, a level established by the 38.2 Fib of the 1.8500-1.7048 USD rally, as greenback traders took over the price action. A move below the 1.7600 figure will most likely see the GBP/USD head lower and with sustained downside momentum breaking below the psychologically important 1.7500 handle, a level defended by the 50-day SMA at 1.7496. A further collapse of the sterling bids will most likely see the greenback longs push the pair lower and test the cable defenses around 1.7450, a level established by the 20-day SMA and acts as a gateway toward the 1.7387, a 23.6 Fib of the 1.8500-1.7048 USD rally. Indicators are mixed with positive momentum above the zero line and negative MACD sloping upward toward the zero line, while overbought Stochastic gives the greenback longs a chance to retaliate.

USD/CHF - Swiss Franc bulls began to cave under pressure asserted by the US dollar counterparts with the pair heading toward the psychologically important 1.3000 handle, a level defended by the 50-day SMA at 1.3005. A further move to the upside will most likely see the dollar traders push the pair above the 23.6 Fib of the 1.2240-1.3285 USD rally at 1.3040, a level further reinforced by the 20-day SMA and aim for the Swissie offers around 1.3154, a December 8 daily high. A sustained momentum on the part of the greenback traders will most likely see the USD/CHF head higher and test the Swiss Franc offers around 1.3291, a level marked by the 2005 high and currently acts as a gateway toward the next psychologically important 1.3500 handle. Indicators are mixed with positive momentum above the zero line and negative MACD sloping upward toward the zero line, while oversold Stochastic gives the greenback traders a chance to retaliate.

USD/CAD - Canadian dollar traders lost more ground to the advancing US dollar counterparts as the pair broke above the 1.1600 handle. As greenback longs continue with their advance, a move higher will most likely see the Loonie bulls give up 1.1686, a level established by October 12 daily low and with a further move to the upside will most likely seeing the US dollar longs test the offers above the 1.1700 handle at 1.1745, a level established by the combination of the 50-day SMA and the 23.6 Fib of the 1.2733-1.1433 CAD rally. A collapse of the Loonie offers will most likely open a door for a further move to the upside with the pair retreating toward 1.1830, a level established by the November 10 daily low. Indicators are favoring of the Canadian dollar longs with both momentum indicator and negative MACD below the zero line, while neutral oscillators give either side enough room to maneuver.

AUD/USD - Australian dollar longs continued their descent after the pair broke below the bids at .7456, a level marked by the 38.2 Fib of the .7798-.7267 USD rally, and was further reinforced by the combination of the 20-day SMA and 50-day SMA's. A collapse below the .7400 figure will most likely see the US dollar traders test the bids around .7383, a level marked by the 23.6 Fib of the 7798-.7267 USD rally, and with sustained momentum to the downside most likely seeing the pair tumble further and test the bids around .7321, a level established by the 23.6 Fib of the .7798-.7267 USD rally. As greenback longs continue to pound the Aussie bids, a collapse of .7265, a 2005 low, will most likely issue a signal that the long-term trend in underway and following a breakdown of .7217, a level created by the October 14, 2003 daily low, will most likely open the psychologically important .7000 handle as a target of opportunity for prospective greenback longs. Indicators are favoring the Aussie longs with both momentum indicator and positive MACD above the zero line, neutral oscillators give either side enough room to maneuver.

NZD/USD - New Zealand dollar bulls continued to bounce around .6869 a level established by the 23.6 Fib .7468-.6681 USD rally, following a temporary inability by the US dollar counterparts to sustain the downside momentum. A further collapse of the Kiwi's bids will most likely see the US dollar traders push the pair below the .6800 level and test the bids around .6780, a level established by the November 15 daily low. A sustained momentum to the downside will most likely see the pair break below the .6700 figure and take on the New Zealand dollar bids around .6686, a level established by the 2005 Low, and with a further collapse of the Kiwi's bids most likely seeing the pair aim for .6599, a level created by the July 16, 2004 daily low. Indicators are mixed with negative 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.

Sam Shenker is a Technical Currency Analyst for FXCM.