EUR/USD - After two wide-ranged bars, the euro has finally taken a breather from its over 300-pip rally against the US dollar.  Former resistance provided by the range high in mid-December around 1.2050 has become immediate support, while Wednesday's intraday high near 1.2150 has carved out the first line of resistance.  This range is unlikely to hold however as volatility returns with the European and New York sessions.  FX traders are prepared to push the pair either way.  If the day's pause in price action proves just a breather for momentum to find its way back to the rally, the confluence of indicators at 1.2225 (a 61.8 fib, 200-day SMA and consolidation area) will prove a good place for dollar bidding to slow a euro ascent.  Conversely, if sideways action for the currency is an initial indication of a stronger dollar retracement, a healthy run could be in store if the pair breaks free of 1.2050.  Noteworthy support is noticeably absent until one approaches the 1.1905 December 21st to January 3rd range high.  If this area of support is only a damper on a run, rather than stopping it in its tracks, another 100 pips could be tacked on to the retracement at the same range's low at 1.1800.  Euro indicators are becoming ever more neutral with the stochs, RSI and ADX looking for a notable read.   The MACD remains the only strong bullish indicator from the previous day's mix after the momentum continued to closer to the zero line.  However, the ATR has just fallen to a low reading which has been historically been followed by euro rallies.

USD/JPY - The short-lasted Japanese Yen rally from earlier this week is either gradually loosing its sheen among traders or is building for another strong break.  A second day with a paltry range has passed with no hint as to a developing direction coming from price action.  With stiff support from around the two-month low 115.50, there is a good probability the next move will come in the dollar's favor.  Daily highs over the past two days have tested and shied away from 116.46, making it a first stop for a dollar run.  More sturdy resistance however will come into play at the 50-day SMA and December 30th high near 118.15.  Taking this level will be more of a challenge for dollar momentum, but its break could leave it open to a continuation all the way to the over two year highs set in early December.  On the contrary, if the Yen can crack 115.50 support, a quick breakout move is likely that would take the pair down around 113.85 where a 38.2 fib of the January 17th to December 7th run lies in wait.  Indicators for the Japanese currency are heading toward neutral across the board.  Slow stochs are edging towards 50 - as is the RSI.  Also the trend gauging ADX is making little headway in moving further above the 20 level while the MACD slow and fast lines stay within arms reach.   If a break is eminent, indicators are not uniting to support it.

GBP/USD - Last night's pound action added further substantiation to resistance provided by the 38.6 fib retracement of the September 5th to November 28th dollar rally at 1.7605.  The day's range was enveloped completely by the preceding bar's range casting a shadow on British Pound bullishness.  If dollar backers take head of the developing price action and drive the GBP/USD back south, there is likely to be a steady move down to the 1.7400 level where the 23.6 fib of the same dollar run sits with the 50-day SMA coming to back it up.  A move beyond the 38.6 fib at 1.7605 will be more difficult to perform.  Not only is the fib protecting this level, but consolidation at this are going back to July will be another brace for resistance.  A break is far from impossible however, and given its importance, a breach would likely be followed by a sharp rally that could be unchecked until the 1.7800 swing high set on December 14th.  Indicators for the pound are still pushing positive sentiment but they are edging towards neutrality.  The MACD is still broadening its positive gap, but the ADX trend is just barely above neutral while the momentum gauge has slowed upside climb.  Already neutral indicators - the stochs, RSI and ATR - are still hovering in dead water.

USD/CHF - Swissie confidence has reached an initial barrier of support near 1.2750.  Even if the Swiss Franc can muster enough strength to push through this level temporary level, there will be a slew of dollar entry orders awaiting price action less than a hundred pips lower.  First line of support is the 200-day SMA at 1.2675; and if that isn't enough to stop a swissie continuation, then consolidation levels scattered around the same level and a 61.8 fib of the September 5th to November 17th US dollar run at 1.2490 will give dollar bids a good platform to take back the pair.  If swissie bulls give up their strength sooner rather than later, there will be a relatively clear sky for the USD/CHF pair to retrace much of the strong franc rally in the beginning of the week.  Higher, resistance will first present itself in the form of the 38.2 fib at 1.2886.   However, this level has been largely ignored by past price action so its prominence is slight.  Concrete resistance really comes at the 23.6 fib at 1.3040 which is also a very solid consolidation level for the second half of 2005.  Though analysis on price action seems to pin a rise in the USD/CHF a more probable move, indicators do not.  Both the RSI and stochs continue to float in their neutral range towards oversold.  The MACD continues to expand its negative read while the ADX is just slightly out of reach of the trend.  Momentum has also stalled its negative slide and is beginning to turn back towards the even mark.

USD/CAD - The Canadian dollar was the only major of the majors to see a decent move, though disappointingly for loonie, it was 160 pip plunge against the benchmark US dollar.  In the run, the ever independent loonie blew through both a consolidation level and 20-day SMA, both around 1.1600.  Taking out both levels wore on the greenback rally however, and the currency settled some 50 pips beyond these levels.  There was little to pull the plug on this momentous rally, besides the obvious lack of volume as the major sessions closed, so a continuation is highly probable.  Spot can easily find its way up to 1.1750 before loonie bidding really halts the move and starts turning this newly developed trend.  1.1750 is strongly supported by a solid range high for November 23rd to the present and has a 23.6 fib of the May 16th to December 14th loonie rally only 20 pips lower.  Turning the boat around for the US dollar's recent rise could be a hard proposition for Canadian dollar bulls.  The 20-day SMA is fresh support and the spike low at 1.1600 represents a closely watched level of consolidation.   The strong dollar rally in the USD/CAD pair has thrown the indicators for a loop.  Both the short-term stoch and RSI are almost perfectly neutral while the trend further evaporates.  The rise has however paid off for momentum, which is millimeters below an upside read, and the ATR which rose back into neutral territory. 

AUD/USD - A doji, whose high has reached a two-week high, is spelling trouble for the strong, 250-pip Australian dollar rally against the US dollar that has sustained itself for since December 28th.  If greenback bulls run with this chart pattern, initial resistance from the range low from August to October at 0.7450 will be a short resting spot before it charges on.  Serious support will cross a dollar run when the 50.0 fib of the June 17th, 2004 to March 8, 2005 Australian dollar run at 0.7384 is reached.  Additional back up from both the 20-day and 50-day SMA at 0.7390 will help to rub out dollar strength.  If one of the closer supports hold and aussie bulls pull the pair back into its strong trend, they will have a clear road until the 200-day SMA at 0.7568.  Aussie indicators are providing significant support for a continuation in its initial run.  Momentum, the MACD and stochs soared despite the stalling in price.  Suspiciously, however, the trend reading ADX continued to fall off while the ATR skips near a 'low' read.

NZD/USD - Two large upper wicks in the past two sessions has proven a correct omen for the struggling New Zealand dollar rally.  Each high, at 1.6900 and 1.6905, has stopped just short of the 50-day SMA before being pulled back down.  With all the greenback bidding that has kept a continuation of the kiwi dollar under wraps, momentum is beginning to shift in the US dollar's favor.  Initial support lies around 0.6870 where the range low from July through December stopped price from sinking to low.  However, the level will not offer a sudden stop to a move, so confirmation is needed from a close below.  Further beyond this first level of support, there is smooth sailing for the choppy pair until the 14-month low at 0.6685.  If kiwi bulls get back on board, they will first have to break the 50-day SMA and then would be able to make a gradual rise to the 200-day SMA at 0.6995.  Kiwi indicators are beginning to support a turn lower for the NZD/USD.  The strong MACD seems to have peaked in its gap as has upside momentum.  ATR is also continuing precipitous drop while the trend looks to leave the pair in the ADX.

Sam Shenker is a Technical Currency Analyst for FXCM.