EUR/USD - Euro bulls were in full retreat after the single currency longs failed to keep the pair above the 1.2200 figure, a level marked by the 61.8 Fib of the 1.2588-1.1639 USD rally at 1.2227. As euro bulls begin to head lower, a sustained break below the 1.2100, a level defended by the combination of the 50.0 Fib 1.2588-1.1639 USD rally and the 20-day SMA at 1.2115, will most likely see the pair extend its decline toward the psychologically important 1.2000 handle, a level established by the 38.2 Fib 1.2588-1.1639 USD rally. A further breakdown will most likely see greenback traders push the pair lower and test the euro's bids around1.1956, a 50-day SMA and with sustained momentum to the downside most likely seeing EUR/USD tumble toward 1.1865, a 23.6 Fib of the 1.2588-1.1639 USD rally. Indicators are favoring euro longs with both positive momentum indicator and MACD treading above the zero line, ADX is above 25 at 25.67 signaling an existence of trend not a direction of one, while neutral oscillators give the pair enough room to maneuver.

USD/JPY - Japanese Yen longs found themselves on the receiving end of the dollar advance as greenback traders pushed the pair above the offers around 117.32, a level established by the 23.6 Fib of the 104.16-121.46 USD rally and the 50-day SMA. A further move to the upside will most likely see USD/JPY head higher and with a move above 118.17, a December 30 daily high, most likely seeing the pair test the yen offers around 119.23, a level marked by the November 28 daily high. A sustained momentum to the upside will most likely see the pair gain further upside momentum and with a break above the psychologically important 120.00 handle, most likely aiming for 121.39, a level defended by the 2005 High and a start of the previous anti-dollar rally. Indicators are mixed with negative momentum indicator above the zero line and MACD below the zero line, with ADX above 25 at 32.04, signaling an existence of a maturing trend, not a direction of one, while neutral oscillators give the pair enough room to maneuver.

GBP/USD - British pound bulls felt the full brunt of the dollar countermove with the pair breaking below 1.7776, a level established by the 50.0 Fib of the 1.8500-1.7048 USD rally. As cable traders continue to unwind their positions, a further move to the downside will most likely see the pair head lower and with a break below 1.7605, a level marked by the key 38.2 Fib of the 1.8500-1.7048 USD rally aim for the sterling bids around the psychologically important 1.7500 handle, a level defended by the combination of the 50-day SMA and December 2 daily high at 1.7487. A sustained momentum of the part of the greenback longs will most likely see GBP/USD retreat further and with further move to the downside taking on pound defense around 1.7393, a 23.6 Fib of the 1.8500-1.7048 USD rally. Indicators are favoring cable longs with both positive momentum indicator and MACD above the zero line, while neutral oscillators give the pair enough room to maneuver.

USD/CHF - Swiss Franc bulls continued to retreat to the upside after the pair broke above the heavy resistance zone around 1.2760, a combination of the 50.0 Fib of the 1.2240-1.3285 USD rally, a 200-day SMA and 20-day SMA, after greenback longs managed to take control of the price action. As greenback longs push the pair higher, a break above 1.2885, a level defended by the 38.2 Fib of the 1.2240-1.3285 USD rally, will most likely see the pair head higher and aim for the Swiss Franc offers around 1.2948, a level marked by the 50-day SMA. A sustained momentum on the part of the dollar bulls will most likely see USD/CHF head above the psychologically important 1.3000 handle and test the Swiss France offers around 1.3037, a level established by the 23.6 Fib of the 1.2240-1.3285 USD rally Indicators are favoring the Swiss Franc longs with both negative momentum indicator and MACD below the zero line, with ADX above 25 at 28.37, signaling an existence of a trend, not a direction of one, while neutral oscillators give the pair enough room to maneuver.

USD/CAD - Canadian dollar longs continued to keep the pair below the psychologically important 1.1500 handle with price action remaining confined to a narrow trading range. As Loonie longs push the pair lower and target the greenback bids around 1.1433, a level established by the December 14 daily low, a further break to the downside will most likely see the pair extend its decline and with a move below 1.1300 figure targeting potential support at 1.1266, a level marked by the 61.8 Fib Extension of the May-Oct CAD rally. A further move on the part of the Loonie longs will most likely see the USD/CAD extend its decline toward the psychologically important 1.1000 handle, a level defended by the 78.6 Fib Extension of the May-Oct CAD rally at 1.1074. Indicators are favoring Canadian dollar longs with both negative momentum indicator and MACD below the zero line, while oversold Stochastic gives the greenback longs a chance to retaliate.

AUD/USD - Australian dollar bulls continued to bounce in a tight range with the pair beginning to slide below the psychologically important .7500 handle, a level defended by the combination of the 50.0 Fib of the .7798-.7236 USD rally and 10-day SMA. A further move to the downside will most likely see the pair head lower and test the Aussie bids around .7437, a level established by the 38.2 Fib of the .7798-.7236 USD rally and is further reinforced by the 50-day SMA at .7444. A further move on the greenback traders will most likely see AUD/USD head lower and with a break below the 7400 figure test the Australian dollar bids around.7362, a level marked by the 23.6 Fib of the .7798-.7236 USD rally. A further move on the part of the US dollar traders will most likely see the pair tumble further and aim for the bids around .7321, a level created by the November 24 daily low. Indicators are supporting Australian dollar longs with both positive momentum indicator and positive MACD above the zero line, while neutral oscillators give either side enough room to maneuver.

NZD/USD - New Zealand dollar bulls managed to keep the pair above the .6800 figure, but failed to push the NZD/USD toward .6873, a level marked by the 38.2 Fib of the.5914-.7466 NZD rally. A reversal from the current levels and a subsequent move below the .6800 level will most likely see the pair test the Kiwi's bids around .6741m a level established by the November 8 daily low. A further move on the part of the greenback longs will most likely see NZD/USD test extend its decline toward .6690, a level defended by the 50.0 Fib of the .5914-.7466 NZD rally, with a further break to the downside aiming for New Zealand dollar bids around .6615, a level marked by the July 19, 2004 daily high.  Indicators are favoring US dollar longs with both negative momentum indicator and positive MACD above the zero line, while neutral oscillators give either side enough room to maneuver.

Sam Shenker is a Technical Currency Analyst for FXCM.