EUR/USD - Euro bulls failed to hold the psychologically important 1.2000 handle, a level established by the 38.2 Fib 1.2588-1.1639 USD rally after the dollar bulls launched a decisive countermove against the unsuspecting single currency longs and took control of the price action. A further move below the 1.2000 figure will most likely see greenback traders push the pair lower and test the euro's bids around 1.1961, 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. A sustained downside momentum will most likely see the pair extend its decline and with a move below the 1.1700 figure most likely targeting the euro's bids around 1.1639, a level established by 2005 low and is currently acting as a gateway toward the psychologically important 1.1500 handle. Indicators are mixed with negative momentum indicator diverging from positive MACD, while overbought Stochastic gives the single currency longs a chance to retaliate.

USD/JPY - Japanese Yen longs managed to temporarily halt the greenback advance as pair stalled below 119.00 figure. As dollar bulls resume their attack, a further move to the upside will most likely see the pair head higher and with a move above 119.93, a level established by November 28 daily high, target the offers around the psychologically important 120.00 figure. A further move 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. A move following the breakout will most likely see the pair extend its gains toward 123.25, a level established by the November 25, 2002 daily high. Indicators are mixed with positive momentum indicator above the zero line and MACD below the zero line, with ADX above 25 at 28.59, signaling an existence of a maturing trend, not a direction of one, while overbought Stochastic adds to the trending outlook.

GBP/USD - British pound longs tumbled like a rock with the pair giving up 1.7605, a level established by the 38.2 Fib of the 1.8500-1.7048 USD rally, as price action once again favored the dollar bulls. A further move to the downside most likely see the dollar traders push the pair below the psychologically important 1.7500 handle and target cable bids around 1.7487, a level marked by December 2 daily high. A sustained momentum of the part of the dollar traders will most likely see GBP/USD retreat further and with a move to the downside take on pound bids around 1.7393, a 23.6 Fib of the 1.8500-1.7048 USD rally. A further collapse of the sterling defenses will most likely see the dollar longs extend their decline below the 1.7200 figure and target cable defenses around 1.7188, a level established by the January 3 daily low. 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 gave up the 1.2900 figure to their dollar counterparts over pair broke above 50-day SMA at 1.2926 and 1.2885, a level established by the 38.2 Fib of the 1.2240-1.3285 USD rally. A further move to the upside will most likely see the pair head higher and aim for the Swiss Franc offers above the psychologically important 1.3000 handle at 1.3037, a level established by the 23.6 Fib of the 1.2240-1.3285 USD rally. A further collapse of the Swissie's offers will most likely see the pair gain further upside momentum and aim for 1.3201, a level established by December 30 daily high. A sustained move on the part of the greenback traders will most likely see USD/CHF continue to gain further ground and take on the Swissie offers around 1.3285, a level established by the 2005 high. Indicators are mixed with negative momentum indicator diverging from positive MACD, while overbought Stochastic gives Swiss Franc bulls a chance to retaliate.

USD/CAD - Canadian dollar traders managed to keep the pair below the psychologically important 1.1500 figure as price action temporarily stalled in a sideways range. In case the Loonie longs resume their advance, a move below 1.1400 will most likely signal a start of another major USD/CAD rally. As Loonie bulls push the pair lower, a 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 1.1249, a level marked by the 1.00 Fib Extension of the Nov-Dec 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 1.382 Fib Extension of the Nov-Dec CAD rally at 1.1040. A sustained momentum on the part of the Canadian dollar longs will most likely see the greenback longs retreat below the psychologically important 1.1000 handle and mount defense around 1.0910, a level marked by the 1.618 Fib Extension of the Nov-Dec CAD rally. 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 retreat after giving up the psychologically important .7500 handle, a level marked by the 50.0 Fib of the .7798-.7236 USD rally to the US dollar counterparts during another bout of greenback bullishness. A further a move to the downside will most likely see the pair 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 .7450. A further move on the part of 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 diverging with negative momentum indicator diverging from positive MACD, while neutral oscillators give either side enough room to maneuver.

NZD/USD - New Zealand dollar remained confined to a tight trading range as the price action headed below .6873, a level marked by the 38.2 Fib of the.5914-.7466 NZD rally and is further reinforced by the 20-day and 50-day SMA's. A reversal from the current levels will most likely see the NZD/USD head below the .6800 level and test the New Zealand dollar bids around .6794 a level established by the January 31 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.