Published on 04/3/2006

In the daily currency technicals, the euro collapses below 1.2100, the Japanese yen heads toward 120.00, the British pound begins to collapse, and the Swiss franc heads above 1.3100.

Dollar Bulls Flex Their Horns

EUR/USD - Euro bulls once again failed to keep the pair above 1.2115, a level defended by the 50.0 Fib of the 1.2588-1.1639 USD rally and retreated toward 200-day SMA at 1.2050. As dollar longs continue with their advance and push the pair below 1.2000 handle, a level defended by the 38.2 Fib of the 1.2588-1.1639 USD rally, 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. However in case euro bulls push the pair back above 1.2115, a further move to the upside will most likely see EUR/USD head toward 1.2227, a level marked by the 61.8 Fib of the 1.2588-1.1639 USD rally. A sustained momentum on the part of the euro bulls will most likely see the pair head higher and target offers around 1.2226, a level marked by the January 25 daily high. 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 continued to retreat after dollar bulls managed to break above 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 greenback longs will most likely see USD/JPY head above the psychologically important 120.00 handle and take on the offers around 120.46, a level marked by the December 13 daily high. However in case dollar bulls fail to push the pair above 119.00, a reversal and a move below 117.35, a level marked by the 23.6 Fib of the 104.16-121.46 USD rally will most likely see USD/JPY head lower and target 116.42, a level created by the March 27 daily low. A further move to the downside will most likely see USD/JPY extending its decline below 116.00 figure, a level defended by the January 17 daily high at 115.93 and with sustained momentum seeing the pair head below the psychologically important 115.00 handle, a level protected by the 38.2 Fib of the 104.16-121.46 USD rally and 200-day SMA at 114.90. Indicators are favoring yen bulls with both negative momentum indicator and negative MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

GBP/USD - British pound longs failed to keep the bids around 1.7399, a level established by the 23.6 Fib of the 1.8500-1.7048 USD rally as dollar bulls continued to push the pair lower. A further move to the downside will most likely see the pair head below 1.7281, a level defended by the February 14 daily low and with sustained momentum to the downside most likely seeing GBP/USD head lower and target sterling bids around 1.7188, a level marked by the January 3 daily low. A further decline will most likely see the pair head lower and with a move below 1.7100 seeing greenback longs take on the pound bids around 1.7048, a level established by the 2005 Low. However in case sterling longs manage to push the pair back above 1.7300, a further move to the upside will most likely see GBP/USD head higher and with a break above 1.7400 most likely seeing sterling longs target the psychologically important 1.7500 handle, a level defended by the combination of the 50-day SMA and March 31 daily high at 1.7477. A further move to the upside will most likely see cable longs target dollar offers around 1.7603, a level marked by the 38.2 Fib of the 1.8500-1.7048 USD rally. Indicators are favoring dollar bulls 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 once again found themselves rallying past offers above 1.3040, a level marked by the 23.6 Fib of the 1.2240-1.3285 CHF after greenback longs launched a massive countermove which pushed USD/CHF above the 1.3100 figure. As greenback longs remain in change of the price action and keep the pair above 1.3100, a further move to the upside will most likely see USD/CHF head higher and target offers around 1.3201, a level defended by the December 30 daily high. A further move to the upside will most likely see the pair head toward 1.3285, a level established by the 2005 High. However in case Swiss Franc bulls manage to regain the control and push the pair below the psychologically important 1.3000 handle, a move below 1.2960, a level marked by the March 31 daily low will most likely see the pair extend its decline toward 1.2885, a level created by the 38.2 Fib of the 1.2240-1.3285 CHF rally. Indicators are favoring dollar bulls with both positive momentum indicator and postive MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver

USD/CAD - Canadian dollar bulls failed in keeping the greenback longs below 1.1638, a level marked by the 23.6 Fib of the 1.2799-1.1297 CAD rally, and retreated above 1.1700 figure. As US dollar longs takeover the price action, a move above 1.1748, a level marked by the January 9 daily high 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 move to the upside will most likely see the pair head above 1.1900 and target Canadian dollar offers around 1.1976, a level marked by the November 15 daily high. However in case Loonie longs resume their advance, a further move to the downside will most likely see USD/CAD head below 1.1600 and with a move below 1.1577, a level marked by the March 31 daily low once again target the 1.1500 figure, a level defended by the March 16 daily low at 1.1512. Indicators are favoring US 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 saw the momentum of their countermove stall as pair once again failed to test the offers around the .7200 figure. As greenback longs take over the price action and push the pair below .7100, a break below the Aussie bids around .7038, a level defended by the 78.6 Fib of the .6780-.7986 AUD rally, will most likely see AUD/USD head below the psychologically important .7000 handle and target Aussie bids around .6932, a level marked by the July 29, 2004 daily low. However in case Aussie bulls manage push the pair higher, a further move to the upside will most likely see AUD/USD break above .7200 figure and target offers around .7242, a level established by the 61.8 Fib of the .6780-.7986 AUD rally. A further move to the upside will most likely see the pair head toward .7304, a level defended by the March 10 daily low. Indicators are favoring US dollar traders with both negative momentum indicator and negative MACD treading below the zero line, with ADX above 25 at 32.00, signaling an existence of a trend, not a direction of one, while overbought Stochastic gives Australian dollar longs a chance to retaliate.

NZD/USD - New Zealand dollar bulls failed to extend their advance toward the .6200 figure as pair stalled around .6179, a level marked by the March 22 daily low. As greenback bulls resume their advance and push the pair below .6100 figure, a further move to the downside will most likely see NZD/USD head lower and target Kiwi bids around .6015, a level defended by the May, 10, 2004 daily low. A further move to the downside will most likely see NZD/USD extend its decline below psychologically important .6000 handle and target bids around .5914 a level marked by the May 18, 2004 daily low. However in case New Zealand dollar bulls manage to push the pair above .6200 figure, a further move to the upside will most likely see the pair extend its advance toward .6247, a level marked by the 78.6 Fib of the .5914-.7486 USD rally. Indicators are favoring US dollar longs with both negative momentum indicator and positive MACD above the zero line, while ADX above 25 at 55.09 signals existence of a maturing trend, not a direction of one, with oversold Stochastic adding to a trending outlook.

Sam Shenker is a Technical Currency Analyst for FXCM.