EUR/USD - Euro bulls continued to retreat as dollar longs pushed the EUR/USD below the psychologically important 1.2000 handle, a level created by the 38.2 Fib of the 1.2588-1.1639 USD rally and is further reinforced by the combination of the 20-day and 50-day SMA's. A further advance by the dollar longs will most likely see the pair head lower target euro offers around 1.1932, a level marked by the December 28 daily high and with further advance on the part of the dollar trader seeing the pair head below 1.1900 figure and target bids around 1.1864, a level defended by the 23.6 Fib of the 1.2588-1.1639 USD rally. A further collapse of the single currency bids will most likely see the pair decline below 1.1800 figure and test euro's defenses around 1.1778, a level established by the December 30 daily low. Indicators are favoring Euro longs with both positive momentum indicator and MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver.

USD/JPY - Japanese Yen longs gave up more territory to the advancing dollar counterparts as USD/JPY staged a sharp rally above 117.35, a level established by the 23.6 Fib of the 104.16-121.46 USD rally and set sights on the yen offers around 118.17, a level marked by the December 30 daily high. A further move to the upside will most likely see the pair extend its gains above 119.00 figure and target offers around 119.39, a level established by the February 3 daily high. A sustained momentum on the part of the dollar bulls will most likely see USD/JPY head above the psychologically important 120.00 handle and target yen offers at 120.48, a level marked by the December 13 daily high, which currently acts as a gateway toward 2005 High at 121.39. Indicators are favoring dollar bulls with both positive momentum indicator and positive MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver. 

GBP/USD - British pound longs continued to decline as pair fell tumbled below 1.7399, a level established by the 23.6 Fib of the 1.8500-1.7048 USD rally during the latest bout of the dollar bullishness. A further move on the part of the greenback longs will most likely see the greenback bulls target sterling bids below 1.7300 figure at 1.7281, a level defended by the February 14 daily low and with sustained momentum on the part of the dollar traders most likely seeing GBP/USD extend its decline toward 1.7188, a level marked by the January 3 daily low. A sustained momentum on the part of the greenback longs will most likely see the pair head lower and target the psychologically important 1.7000 handle, a level defended by the 2005 Low at 1.7048. Indicators are favoring dollar longs with both negative momentum indicator and negative MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

USD/CHF - Swiss Franc bulls extended their retreat above the 1.3100 figure as dollar longs continued to dominate the price action since the beginning of the week. As greenback bulls push the pair higher, a further move to the upside will most likely see the pair extend its advance toward Swiss Franc defenses around 1.3201, a level defended by the December 30 daily high. A sustained momentum to the upside will most likely see USD/CHF head higher and with a break above 1.3285, a 2005 High most likely seeing the pair gain further momentum and target offers around 1.3446, a level not seen since October 17, 2003 daily high, a level which acts as a gateway toward the psychologically important 1.3500 handle. Indicators are favoring dollar bulls with both positive momentum indicator and positive MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver. 

USD/CAD - Canadian dollar bulls gave up more territory to the advancing US dollar bulls as USD/CAD remained above the 1.1639, a level marked by the 23.6 Fib of the 1.2799-1.1297 CAD rally. A further move to the upside will most likely see the pair extend its advance and with a move above 1.1700 figure targeting Loonie offers around 1.1748, a level marked by the January 9 daily high. A sustained upside momentum will most likely see USD/CAD advance above 1.1800 figure and with further momentum targeting 1.1848, a level defended by the 38.2 Fib of the 1.2799-1.1297 CAD rally. A further rally on the part of the US dollar bulls will most likely see the USD/CAD target the psychologically important 1.2000 handle, a level defended by the November 15 daily high. Indicators are favoring dollar bulls with both positive momentum indicator and positive MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver. 

AUD/USD - Australian dollar bulls felt the bids part beneath them as pair tumbled below .7100 figure as greenback longs extended their recent rally. As greenback longs continue with their advance and AUD/USD the pair lower, a further move to the downside will most likely see the pair target Aussie bids around .7038, a level defended by the 78.6 Fib of the .6780-.7986 AUD rally. A sustained downside momentum will most likely see greenback longs push the pair below the psychologically important .7000 handle. A sustained momentum on the part of the greenback longs will most likely see AUD/USD head lower and target Aussie bids around .6932, a level marked by the July 29, 2004 daily low. A further break to the downside will most likely see US dollar capture more territory and target Aussie bids around .6851, a September 9, 2004 daily low. Indicators are favoring US dollar trader with both negative momentum indicator and negative MACD treading below the zero line, with ADX above 25 at 25.78, signaling an existence of a trend, not a direction of one, while both oversold oscillators add to a trending outlook.

NZD/USD - New Zealand dollar miserable failed to stall the advance by the US dollar longs as pair collapsed through .6246, a level marked by the 78.6 Fib of the .5914-.7466 NZD rally. As US dollar longs follow through with their advance, a sustained momentum to the downside will most likely see NZD/USD extend its decline below .6100 figure and target Kiwi's bids around .6015, a level defended by the May, 10, 2004 daily low, thus seeing the pair resume target the psychologically important .6000 handle. A move below .6000 figure will most likely see the pair head lower and target bids around .5914 a level marked by the May 18, 2004 daily low and with further move to the downside most likely seeing the pair accelerate to the downside and target .5808, a September 1, 2003 daily high. Indicators are favoring US dollar longs with both negative momentum indicator and positive MACD above the zero line, while ADX above 25 at 52.28 signals existence of a trend, not a direction of one, with both oversold oscillators add to a trending outlook.

Sam Shenker is a Technical Currency Analyst for FXCM.