EUR/USD â�,�“ EUR/USD printed its first red candle on the daily chart in over a week and lower prices in early morning trading suggest that we may see two consecutive red candles for the first time since 4/6 and 4/7.  Weâ�,��"�ll reiterate yesterdayâ�,��"�s remarks that the rally from 1.1825 to 1.2786 pierces 1.2770, or the 138.2% of wave 1 (1.1640-1.2323) with wave 3 beginning at 1.1825.  â�,��"This is compelling technical evidence that a short term top may be formingâ�,� (yesterday).  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% and 38.2% fibos of 1.1640-1.2790 at 1.2521 and 1.2351.  A bullish bias remains intact as long as the 1/25 high of 1.2323 holds as support.

USD/JPY â�,�“ After puncturing 111.00 yesterday, USD/JPY rallied to close above the 50% fibo of 101.65-121.37 at 111.50.  If yesterdayâ�,��"�s low at 110.96 holds as support, then contra moves towards the 5/1 low at 112.33 as well as the 23.6% fibo of 118.82-110.96 at 112.81 are possibilities.    A break of yesterdayâ�,��"�s low exposes the 7/21/05 low at 109.85.  Taking a step back and looking at the bigger picture, the decline from the 121.38 high made on 12/5/2005 to 113.41 on 1/12/06 can be numbered the first wave in a larger decline which means that possible downside targets are 108.43 (118.82 - 138.2% * (121.38-113.41)) and 106.57 (118.82 - 161.8% * (121.38-113.41)).     

GBP/USD â�,�“ Cable rallied above its Fibonacci extensions of 1.7046-1.7934 from 1.7229 at 1.8660 (161.8% * (1.7934-1.7046) + 1.7229 = 1.8660) briefly but closed below the technical level and formed a reverese hammer in the process, giving scope to a much needed correction.  Such violent moves often lead to more severe corrections.  An extended move attracts more and more latecomers and when the ensuing corrective move does begin, the latecomersâ�,��"� stop losses and margin calls exacerbate the move.   Support comes in at the 9/5/05 high of 1.8501 followed by the 5/1 high at 1.8413.  A break above yesterdayâ�,��"�s high targets the 7/19/2004 high at 1.8768.

USD/CHF â�,�“ USD/CHF rallied off of its low just below the 1.2200 figure and closed near the confluence of the 5/1 low / 138.2% of 1.2553-1.3235 at 1.2285/93.  CCI on the daily has finally turned up and is now > -100.  Also, positive divergence with the indicator on the daily suggests that the pair may spend some time in a range to improve the â�,��"healthâ�,� of the trend.  The 161.8% fibo 1.2553-1.3235) at 1.2133 sits at 1.2133 and is likely the next target on a break below yesterdayâ�,��"�s low at 1.2179.  A break below there targets the 61.8% of 1.1281-1.3235 at 1.2030.

USD/CAD â�,�“ USD/CAD has rallied off recent lows to test the 5/2 high at 1.1166 and currently sits at the 10 day SMA at 1.1140.  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 â�,�“ 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 â�,�“ Yesterdayâ�,��"�s observation that â�,��"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/USDâ�,� looks prophetic at the moment as the pair trades 100 pips off of yesterdayâ�,��"�s high at 1.7640.  The Aussie currently tests the confluence of the 5/1 high / 10 day SMA at .7636/37 but a break below would expose the 1/31, 2/1 highs at .7585.  Daily oscillators favor a continuation of the contra move as 21 day RSI has turned down from above 70.

NZD/USD â�,�“ Kiwi continues to weaken through .6250 as the pair has given up nearly 200 pips since yesterdayâ�,��"�s high.  The pair has fallen through both the 20 and 50 days SMAâ�,��"�s near .6300 and is rapidly approaching the 4/25 low at .6229.  A break below there exposes the 50% fibo of .5991-.6443 at .6216.  RSI (21 period) has fallen below its 50 midpoint on the daily and MACD is looks poised for a negative cross just above its 0 line.  Bearishness is bolstered by the fact that the last two days have taken out the previous 8 daysâ�,��"� lows but a bounce encounters resistance at the 4/27 low of .6267 as well as yesterdayâ�,��"�s low at .6313.

Jamie Saettele is a Technical Currency Analyst for FXCM.