EUR/USD - Euro bulls continued to tread sideways as price action stalled below the psychologically important 1.2000 handle, a level established by the 38.2 Fib 1.2588-1.1639 USD rally and is further reinforced by the 50-day SMA. As greenback longs resume their advance, a move below the 1.1900 figure will most likely see dollar bulls push EUR/USD lower and test the single currency bids around 1.1865, a level marked by the 23.6 Fib of the 1.2588-1.1639 USD rally. A sustained momentum will most likely see the pair extend its decline and target euro's defenses around 1.1778, a level created by the December 30 daily low. A further move to the downside will most likely see the pair collapse below the 1.1700 figure and target bids around 1.1639, a level established by 2005 low, which currently acts as a gateway toward the psychologically important 1.1500 handle. Indicators are mixed with negative momentum indicator diverging from positive MACD, while oversold Stochastic gives the single currency longs a chance to retaliate.

USD/JPY - Japanese Yen longs continued to tread sideways following a sharp rally which took the pair below the 118.00 figure. As greenback longs launch a countermove, a subsequent rally will most likely see the pair once again head above 119.00 figure and momentum target 119.93, a level established by November 28 daily high, which acts as a gateway toward the psychologically important 120.00 figure. A further move to the upside will most likely see the USD/JPY break above the psychologically important 120.00 handle, and with further move to the upside 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 26.16, 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 gave up further ground to the advancing dollar bulls with the latest swing to the downside approaching the 1.7400 figure. A further move to the downside most likely see the dollar traders push the pair below 1.7400 and 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 bids 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. A sustained momentum to the downside will most likely see the pair aim for 1.7048, a level defended by the November 11 daily low, breaking of which will most likely see the pair gain further momentum and break below the psychologically important 1.7000 handle. 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 keep the pair in a tight range after pushing the pair below the psychologically important 1.3000 handle. As dollar bulls resume their advance and push USD/CHF above the 1.3000 handle, a break above 1.3037, a level established by the 23.6 Fib of the 1.2240-1.3285 USD rally, will most likely see the greenback traders take on the Swissie's offers 1.3201, a level established by December 30 daily high. A further momentum on the part of the dollar traders will most likely see USD/CHF continue to gain ground and test Swissie's offers around 1.3285, a level established by the 2005 high. A confirmed break above the trading range's high will most likely see the pair aim for the next psychologically important 1.3500 handle. 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 lost the shoving match and once again retreated above the psychologically important 1.1500 handle. As price action swings in favor of the US dollar traders, a move above 1.1584. a level marked by the 50-day SMA will most likely see the USD/CAD head above 1.1600 figure and target the Loonie offers around 1.1697, a level established by the 23.6 Fib of the 1.2733-1.1373 CAD rally. A further advance on the part of the greenback longs will most likely see the USD/CAD retreat toward the 1.1800 level, a level defended by the January 19 daily high at 1.1797. In case US dollar bulls manage to maintain the upside momentum, a further move to the upside will most likely see the pair advance toward the psychologically important 1.2000 handle. 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 continued to tumble as pair slid below the .7400 figure as greenback longs extended their rally. A sustained break below .7362, a level marked by the 23.6 Fib of the .7798-.7236 USD rally will most likely see the pair head lower and aim for the bids around .7321, a level created by the November 24 daily low. A further advance on the part of greenback longs will most likely see the pair collapse below .7300 figure and target Aussie bids around .7234, a level defended by the December 27 daily low. A confirmed break below .7234 will most likely open the psychologically important .7000 handle as a target of opportunity for prospective US dollar bulls. 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 continued to bounce in a tight trading range with the pair sliding below the .6800 figure. A further move to the downside will most likely see the US dollar trader push the NZD/USD below the .6700 level and test the New Zealand dollar bids around .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. A further break to thee downside will most likely see the pair take on the Kiwi's defenses around .6507, a level established by the 61.8 Fib of the .5914-.7466 NZD rally and is acting as a gateway toward the psychologically important .6500 handle. 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.