EUR/USD ââ,¬â€œ EUR/USD continues to hold above the 1.2700 figure during early morning trading.  There is no doubting that this move up is fierce (ADX is at its highest since late in 2004) and must be respected, but might we be close to a short term top?  The rally from 1.1825 to 1.2764 is nearly 138.2% of the 1.1640-1.2323 rally.  The exact 138.2% level is 1.2770 which also intersects with the 4/15/2005 low of 1.2767.  This is compelling technical evidence that a short term top may be forming.  A continuation of strength past 1.2770 targets the confluence of the 2/18/2004 high / 161.8% extension at 1.2927/31.  If this is indeed a short-term top, then look for contra moves towards the 5/4 low at 1.2570 as well as the 23.6% fibo of 1.1825-1.2764 at 1.2543.

USD/JPY ââ,¬â€œ The Yen has beaten the dollar down to below 112.00 and USD/JPY has registered its lowest prices since 9/23/2005.  ADX is its highest since 11/05/2005, which was near the end of the dollar rally to 121.38.  Currently trading below the 50% fibo of 101.67-121.38 at 111.53, continued losses target the 61.8% fibo at 109.22.  Resistance comes in at the 5/1 low of 112.33 followed by the 5/3 low at 112.88.  Oscillators on the hourly charts are extremely oversold but this means little in a strong trending market.

GBP/USD ââ,¬â€œ Just when it appears as if Cable was getting tired, the pair further distances itself from 1.8500, much like  Barbaro did to the rest of the field in Saturdayââ,¬â"¢s Kentucky Derby.  GBP/USD sits atop the confluence of the 61.8% of 1.9542-1.7048 / 3/28/05 low at 1.8587/90.  Fibonacci extensions from 1.7046-1.7934 project a possible end of the rally from 1.7229 at 1.8660 (161.8% * (1.7934-1.7046) + 1.7229 = 1.8660).  A break above targets the 7/19/2004 high at 1.8768.  The move is overextended, which is suggested by the fact that 21 day RSI is at its highest level since January 2004, when GBP/USD was on its way to 1.9548.  Initial support sits at the 5/4 high at 1.8547 followed by the 9/5/2005 high at 1.8501.

USD/CHF ââ,¬â€œ USD/CHF blew by the confluence of the 5/1 low / 138.2% of 1.2553-1.3235 at 1.2285/93.  The 161.8% fibo at 1.2133 sits at 1.2133 and is likely the next target for short profit taking / potential buying.  A break below there targets the 61.8% of 1.1281-1.3235 at 1.2030.  Like the other majors, ADX is at its highest on the daily since December 2004.  Positive divergence on the daily would give us a fairly strong indication that the pair may be ready to turn in a ranging market but the strength of this trend need not be challenged. Further, CCI remains below 100 on the daily ââ,¬â€œ and is suggestive of a still strong downtrend.

USD/CAD ââ,¬â€œ The contra move up was rejected at 1.1142 Thursday and the pair continues to weaken and now trades below 1.1050 and close to its 1.1011 low Wednesday.  The consolidation of the extreme losses could still test the 23.6% fibo of 1.1771-1.1011 at 1.1188 with a break exposing the confluence of the 38.2% fibo / 3/2 low at 1.1297/1.1300 ââ,¬â€œ a level which if held keeps the recent downtrend from 1.1771 intact.  A resumption of the downtrend encounters the 5/3 low at 1.1011 low and eventually the 20% fibo of 1.1297-1.1771 at 1.0825.  The downtrend remains intact as long as the low from 3/2 at 1.1297 holds as resistance.

AUD/USD ââ,¬â€œ The Aussie currently tests the confluence of the 5/5 high / 127% fibo of .7585-.7016 at .7737/43.  A break above targets the 9/12/2005 high at .7762 followed by the 138.2% fibo of .7585-.7016 at .7799.  A doji from Friday on the daily combined with the previously described resistance and negative divergence with oscillators on the daily suggests that we may be at a turning point in AUD/USD.  Support resides at Fridayââ,¬â"¢s low of .7675 followed by the 5/1 high at .7636.

NZD/USD ââ,¬â€œ Kiwi is by far the weakest of the majors against the dollar as the pair trades back below the .6400 figure.  The last 3 dayââ,¬â"¢s highs at .6443, .6437, and .6437 (again) look to have formed a solid wall of resistance and it would take a daily close above there to give scope to any bullish action.  Support comes in from the 23.6% fibo of .5991-.6443 at .6337 followed by the 38.2% fibo at .6271.

Jamie Saettele is a Technical Currency Analyst for FXCM.