EUR/USD - Euro traders were unseated as a king of 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 single currency bulls to gain momentum above the 1.2000 handle. As the price action switches sides in favor of the dollar longs, the next move to the downside will most likely see the pair break below the 1.1840-1.1885 zone, a potential support 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 and with further move to the downside will most likely seeing the pair head below the 1.1800 figure and target the single currency bids around 1.1776, a level established by December 12 daily low. A further move to the downside will most likely see the pair head lower and target 1.1639, a level marked by the 2005 Low. Indicators are favoring the euro longs with both positive momentum indicator and MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver.

USD/JPY - Japanese Yen bulls managed to temporarily halt their retreat as the pair found active 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. As greenback bulls resume their advance and push the pair higher the next move to the upside will most likely see the dollar trader 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. A sustained upside momentum on the part of the greenback longs will most likely see the USD/JPY head higher and aim for the offers above the psychologically important 120.00 handle at 120.46, a level marked by the December 13 daily high. 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 36.32, 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 further extended its decline as the pair tumbled below the 1.7600 figure following the surprise move by the greenback longs. A further next move to the downside most likely see the GBP/USD head lower and with sustained 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. A further collapse of the sterling bids will most likely see the pair aim for the psychologically important 1.7000 handle, breaking of which will confirm a dollar dominated trend that will most likely extend toward the 1.6300-1.6700 zone. Indicators are favoring the pound longs with both positive momentum indicator and MACD treading above the zero line, while overbought Stochastic gives the greenback longs a chance to retaliate.

USD/CHF - Swiss Franc bulls saw the price action turn against them with USD/CHF rocketing through the psychologically important 1.3000 handle along with 23.6 Fib of the 1.2240-1.3285 USD rally at 1.3040, a level further reinforced by the combination of the 20-day and 50-day SMA's. A further advance by the dollar bulls will most likely see the pair aim for the Swissie offers around 1.3154, a December 8 daily high and with sustained momentum on the part of the greenback traders will most likely seeing the USD/CHF head higher and test the Swiss Franc offers around 1.3291, a level marked by the 2005 high. A breakout will most likely see the pair gain upside momentum and aim for 1.3389, an October 3, 2003 daily high, a level which currently acts as a gateway toward the next psychologically important 1.3500 handle. Indicators are favoring the Swiss Franc longs with both negative momentum indicator and MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CAD - Canadian dollar traders lost furhter ground to the advancing US dollar counterparts as the pair extended its advance toward 1.1741, a level established by the combination of the 50-day SMA and the 23.6 Fib of the 1.2733-1.1433 CAD rally. Another collapse of the Loonie offers will most likely open a door for a further move to the upside with the pair heading toward 1.1830, a level established by the November 10 daily low. A sustained momentum on the part of the dollar longs will most likely see the pair head higher and test the offers around 1.1927, a 38.2 Fib of the 1.2733-1.1433 CAD rally, a level that currently acts as a gateway to the psychologically important 1.2000 handle. Indicators are diverging with positive momentum indicator above the zero line while negative MACD is sloping upward toward the zero line, while neutral oscillators give either side enough room to maneuver.

AUD/USD - Australian dollar longs halted their descent after the pair broke .7383, a level marked by the 23.6 Fib of the 7798-.7267 USD rally, but failed to break the bids around .7321, a level established by the November 28 daily low. As greenback longs resume their advance, 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 diverging with positive momentum indicator above the zero line while negative MACD is sloping upward toward the zero line, neutral oscillators give either side enough room to maneuver.

NZD/USD - New Zealand dollar bulls managed to keep the .6800 handle after the US dollar counterparts failed to sustain the downside momentum. A further collapse of the Kiwi's bids will most likely see the greenback longs advance 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.