EUR/USD - The EUR/USD pair sailed through former two month highs and the 50.0 fib of the 1.2589 - 1.1640 USD rally at 1.2085 and 1.2112 respectively following the largest one day gain in the euro since August of 2004.  Though the pair has cleared significant resistance levels, the 1.2225-ceiling backed by a 61.8 fib and 200-day SMA looms just over the horizon.  Price action has stopped short of this resistance; but its breach would leave the pair technically undefended for another 125 pips until the 76.0 fib at 1.2350, backed by consolidation areas throughout the second half of 2005, is reached.  If the initial dollar retracement proves more than just a feigned attempt at taking back control, a greenback run could make quick work of the 1.2000 level before pushing to the ranged levels the pair was confined to in the final weeks of December.  Indecision in the underlying seems to be fulfilling similar sentiment given by the indicators.  Stochs are still pressing in the neutral range with the trend absent.  Also noteworthy, momentum began to fizzle while the RSI has stopped short of reaching an overbought signal. 

USD/JPY - A prominent doji formed in the Japanese Yen-backed major in Asian session trading confirming support offered by the December 19th swing low around 115.50.  The confirmation of this level has in effect put USD/JPY in a range between it and resistance from the 50-day SMA up at 118.15.  A run to this first strong level of yen strength looks to be a probable course for the pair.  If dollar rallying pushes the pair beyond this level, consolidation back in November and December around 119.60 will be the next area for the bulls and bears to jostle for position.  On the other hand, if the yen catches a second wind and breaks 115.50 support, it could be clear sailing for technical traders down to 113.75/95.   A potent mixture of a 38.2 fib of the 101.70 - 121.45 USD rally and the July 20th spike high, not to mention the psychological significance of the 114.00 level, will offer a good base for dollar confidence to rebound.  There is little consensus among the indicators for the pair, besides hints of indecision.  The stochs and RSI despondently coast in neutral while the MACD tells little with its negative read and the ATR falls back off of its high mark.  The ever weakening trend from the ADX however is showing signs of revitalization by nudging higher.

GBP/USD - British Pound bulls extended their rally to bring the GBP/USD pair in contact with the 38.6 fib of the 1.8506 - 1.7048 USD rally at 1.7600; but, after two days of strong advancement,  it finally took breather.   A retracement of the two day rally began to inch the major in the dollar's favor with bears attempting to rally momentum to the 23.6 fib at 1.7395 with the 50-day SMA mere pips away.  Breaking this support would leave a complete retracement of January's rally open to market participants with 1.7200 a stop away from the two year low 1.7050 level.  If pound bulls can regain control before their lead has eroded too far, strength could carry them through the 38.6 fib to the December 14th spike high that many are eyeing at 1.7800.  A few indicators are supporting the pound's new-year trend. Momentum is on the rise while the MACD is extends its positive phase.  Stochs have also crossed out of oversold territory and are moving strongly higher.  The ATR and RSI on the other hand still flounder in neutral with little hint to make a sign in the near future.

USD/CHF - Swiss Franc runners took the 50.0 fib of the 1.2236 - 1.3287 USD rally at 1.2762 just to be stopped in their tracks a little further down.  This erosion of strength just south of the fib and December 14th swing low at the same level leaves it susceptible to another swissie extension which would come up with support from the 200-day SMA's confluence with consolidation areas in September and October.  Back to the north, if the dollar can jump start the initial inklings of strength it is showing, a retracement of the previous two days' rally could be uninterrupted until the 23.6 fib at 1.3045 - lining up with 50-day SMA to make for a staunch level.  Swissie indicators are lining up behind the strong downside move.  Stochs are making a fast break off of the overbought level reached a few days ago, while the MACD broadens its negative expansion.  Also, momentum is spiking to the downside while the trend-indicating ADX - while not yet verifying the trend - is on the rise.

USD/CAD - Loonie bulls were undaunted by psychological levels and rallied their currency for a second day against the US dollar.  The USD/CAD pair sheered the 1.1500 level cleanly in trading and entered into the tail of the spike low from December 14th which set the new 13-year low for the pair.  Moving into this level, the single currency is once again trail blazing prices and significant levels are hard to come by.   The nearest level of support is the long-term low itself at 1.1430 with psychology once again playing its role with the 1.1400 level.  Cutting below this will be leave technical support absent until the spike low back in 1990 at 1.1270 - a strong run if realized.  If dollar bulls can finally take back control from the seven months of control by the loonie bulls, there will be a first stutter in price at the 20-day SMA at 1.1605 before really being tested with consolidation resistance at 1.1750.  Indicators are spelling greater support for another leg of loonie control.  The stoch is on a burning path to oversold and RSI inches from a similar read.  Furthermore, the MACD is expanding its negative read while both the MACD and ATR sink. 

AUD/USD - A sixth session for the Aussie bulls.  The lumbering Australian dollar has taken out the consolidation area at 0.7450 with brute force to keep the trend intact.  With the momentum this pair holds and its indifference to most fib levels, the next strong level of resistance doesn't come into view until the 200-day SMA at 0.7568 which coincides with the swing high from December 14th.  This rally has also left serious support levels at quite a distance, allowing a retracement quite a bit of room to run.  First support lies down around 0.7385 where the 50.0 fib of the 0.6776 - 0.7991 aussie dollar rally converges with the swing low back in July.  Taking this level out would signify a strong US dollar trend which would likely be a nonstop move to the fourteen month low 0.7240.  Aussie indicators are responding to the strength in the single currency.  MACD and momentum are furthering their positive gap, while the RSI and stochs are advancing through neutral territory to an overbought read.  The trend is also being reporting a resurgence indicated by the ADX.

NZD/USD - Multiple tests of near resistance at  0.6850 finally paid off for the New Zealand dollar with the pair finally breaking the level to spike above 0.6900 before taking a breather.  The kiwi has furthered the importance of the 0.6900 level as a strong area of consolidation by making a third month of hesitancy at the level.   The slow pace the currency pair has been on will make the seemingly small level a difficult one to breach, but any possibly strong rally will further be totally capped by the 200-day SMA at 0.6995.  If the retracement picks up steam, the range low from July through December will be the first area for braking before the 14-month low at 0.6685 steals all momentum for a US dollar rally.  Indicators continue to back an extension on the kiwi run.  Stochs continue to make a beeline for the overbought level, with plenty of ground to cover before obtained; while the RSI continues to dither.  Strength is also confirmed by the accelerating MACD and growing upside momentum.  Caution should be taken however with the ADX signaling a further diminishing trend.

Sam Shenker is a Technical Currency Analyst for FXCM.