EUR/USD ââ,¬â€œ The correction appears to be underway as evidenced by the bearish engulfing candle on the daily occurring at the confluence of the upper Bollinger band (daily) 138.2% fibo of 1.2588-1.1640 at 1.2948.  Bearishness going forward is also suggested by MACD slope turning negative after yesterdayââ,¬â"¢s decline.  Intense rallies often see material corrections and as such the first significant support is suggested by the 23.6% fibo of 1.1640-1.2972 at 1.2658.  Additional support rests at the 9/2/05 high of 1.2588.  Yesterdayââ,¬â"¢s 1.2970 high is immediate resistance.

USD/JPY ââ,¬â€œ USD/JPY hovers around the psychological 110.00 figure after coming close to the 61.8% fibo of 101.67-121-38 at 109.22 and forming consecutive days with long lower wicks.  USD/JPY has also formed an inside day close to its lower Bollinger band and this offers upside potential with little risk to the downside.  In this sense, the pair looks similar to USD/CAD did last Wednesday.  In the event that weakness does persist past Fridayââ,¬â"¢s low at 109.29, support exists at the 9/5/2005 low of 108.75.  This eveningââ,¬â"¢s Tokyo high at 110.85 is resistance as is a potential resisting trendline from 4/19 just above 111.00.

GBP/USD ââ,¬â€œ Like EUR/USD, Cable formed a bearish engulfing pattern at a fibo level (76.4% of 1.9546-1.7046), giving scope to a rather material correction of the impressive strength going forward.  Hourly oscillators are turning increasingly bearish as RSI and MACD are now below 50 and 0.  Support rests at the 10 day SMA at 1.8678 followed by the confluence of the 5/11 low / 23.6% fibo of 1.7046-1.8997 at 1.8530/40.  The 5/12 and 5/15 highs (1.8595/98) are resistance should strength return.

USD/CHF ââ,¬â€œ USD/CHF reversed course at he confluence of the lower Bollinger band (daily) / 127% of 1.2236-1.3283 at 1.1952 and erased nearly all of Fridayââ,¬â"¢s losses yesterday.  Oscillators on the daily are turning up for the first time in a while and RSI is now > 30.  Continued strength probes the confluence of the 23.6% fibo of 1.3230-1.1919 / 9/5/05 low at 1.2226/36.  A break below yesterdayââ,¬â"¢s 1.1919 low encounters potential buying at the 138.2% fibo of 1.2236-1.3286 at 1.1840.

USD/CAD ââ,¬â€œ USD/CAD continues to make a countertrend move ââ,¬â€œ rallying the past 4 days (and currently gaining for a 5th consecutive day).  1.1156/75 (23.6% fibo of 1.1771-1.0969 / 5/2, 5/9, 5/15 highs / 20 SMA) is a resistance zone that has been tested and held over the past week but if it gives way, then a test of the 38.2% fibo at 1.1274 enters the realm of possibilities.  Strengthening RSI > 50 on the hourly favors such a scenario.  Initial support is at todayââ,¬â"¢s low of 1.1116 with additional support at the confluence of yesterdayââ,¬â"¢s low / 10 day SMA at 1.1075.

AUD/USD ââ,¬â€œ A small correction of recent strength was in order and AUD/USD traded up towards the .7650 figure before sellers pushed the pair back towards the .7600 figure.  8 day momentum changed to negative after yesterdayââ,¬â"¢s 129 pip decline.  Also, the Aussie has not traded below the 20 day SMA since early April but appears on the verge of breaking below it now.  Support is just below at the 2/1 high of .7585 with a additional losses exposing the 38.2% fibo of .7014-.7790 at .7496.

NZD/USD ââ,¬â€œ Kiwi continues to break down and currently trades at the confluence of its lower Bollinger band on the daily / 5/11 low at .6200.  The head and shoulders reversal has played out wonderfully but there is likely much more room for weakness with the pair now trading just at its neckline.  The fact that this neckline slopes down suggests that prospects for NZD/USD are more bearish than for AUD/USD.  Support is below at the 61.8% fibo of .5991-.6217 at .6165 followed by the 76.4% fibo at .6098.

Jamie Saettele is a Technical Currency Analyst for FXCM.