EUR/USD - Euro continued to tread sideways as the price action remain confined to 1.1820-1.1870 zone, a range 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. As greenback traders once again push the pair lower, a further move to the downside will most likely see 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 sustained downside momentum will most likely see the EUR/USD head lower and target 1.1639, a level marked by the 2005 Low, breaking of which will most likely see the dollar traders set their sights on the psychologically important 1.1500 handle, a level defended by the single currency bids around 1.1546, an October 17 2003 daily 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 once again defended 117.37, a level established by the 23.6 Fib of the 104.16-141.46 USD rally, after the greenback longs managed to push the pair above the 117.00 figure. As dollar longs continue to bid up the pair, the next move to the upside will most likely see the greenback traders extend their gains above the 118.00 figure and take out the yen defenses around 118.21, a level established by the November 23 daily low and is reinforced by the 20-day SMA. 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 34.65, 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 continued to trade in sideways range after the pair broke below the bids around 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 1.7249, a December 2 daily low, and with a move lower heading toward 1.7054, the most recent 2005 Low and a gateway to the psychologically important 1.7000 handle. A further decline below 1.7000 will most likely see the dollar traders push the GBP/USD lower and test the sterling bids around 1.6877, a level established by the November 28, 2003 daily low. Indicators are mixed with negative momentum indicator diverging from positive MACD, while neutral oscillators give either side enough room to maneuver.

USD/CHF - Swiss Franc traders saw the pair stall around 1.3154, a December 8 daily high as the price action remains subdued in a thin holiday market. As greenback longs resume their advance, a move higher will most likely see them test the Swiss Franc offers around 1.3291, a level marked by the 2005 high with a breakout most likely seeing 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, breaking of which will see the USD/CHF test the Swiss Franc offers around 1.3525, a level established by the September 29, 2003 daily high. Indicators are mixed with negative momentum indicator diverging from positive MACD, while neutral oscillators give either side enough room to maneuver.

USD/CAD - Canadian dollar traders failed push the pair lower after finding active bids around 1.1650 as the pair stalled above the 20-day SMA at 1.1613. Another attempt by the greenback traders to break above the Loonie offers will most likely see the pair once again test the 1.1743 resistance and with a move to the upside most likely see the USD/CAD head 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 continued to tread sideways after the pair broke below the bids around .7300 figure, but failed to gain momentum due to illiquid trading conditions. As greenback longs extend their advance, a collapse of .7265, a 2005 low, will most likely issue a signal that the long-term trend in underway and a breakdown of .7217, a level created by the October 14, 2003 daily low, will most likely see the AUD/USD gain further momentum and aim for .71333, a level marked by the August 14, 2004 daily low, breaking of which will open the psychologically important .7000 handle as a target of opportunity for prospective greenback longs. Indicators are supporting US dollar longs with both negative momentum indicator and negative MACD below the zero line, with ADX above 25 at 26.07, signaling an existence of a maturing trend, not a direction of one, while extremely oversold Stochastic adds to the trending outlook.

NZD/USD - New Zealand dollar bulls managed to temporarily pause their descent as the pair stalled above the .6700 handle with long-legged doji signaling a potential reversal. 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. A further move to the downside will most likely see the NZD/USD head lower and test the bids around .6514, an August 9, 2004 daily low, and is currently acting as a gateway to the psychologically important .6500 handle. Indicators are supporting US dollar longs with both negative momentum indicator and negative MACD below the zero line, with ADX above 25 at 27.26, signaling an existence of a maturing trend, not a direction of one, while extremely oversold Stochastic adds to the trending outlook.

Sam Shenker is a Technical Currency Analyst for FXCM.