EUR/USD - The inability of EUR/USD to hold above the 6/27 high at 1.2618 negates the bullish stance and suggests that the pair may be in a larger wave C decline (3rd wave of a correction) to complete a correction of strength to 1.3666.  C waves tend to be rather destructive, so the decline could be fast and furious.  Oscillators on the hourly are massively oversold so a near term bounce is likely.  Resistance is at the mentioned 1.2618.  Continued weakness may support at the 6/28 and 6/29 lows at 1.2517/19 but the 6/23 low at 1.2481 must hold for bulls to have any hope.  If that fails to hold, then the 1/25 high at 1.2323 is in sight.  Reinforcing a bearish bias is the fact that price dropped below the 20 day SMA yesterday.           

USD/JPY - USD/JPY is approaching a resisting trendline and therefore potential resistance.  The line connects the 12/5 high at 121.38 as well as the 4/11 high at 118.87 and is currently at about 117.00.  If resistance fails, then the door is open for a test of the 4/19 and 4/20 highs at 117.89/92.  A failure may send price back to former resistance (now support) at Friday's high of 116.38.  Like EUR/USD, the move looks overextended on a short term basis and may be due for a correction.  If 116.38 is broken to the downside, then the 7/12 high at 115.71 would become support.

GBP/USD - Cable begins the week stumbling - already down nearly 200 pips and testing the 1.8200 figure.  The move below the 7/12 low at 1.8308 negates any bullish implications from the inverse head and shoulders pattern.  Support at current levels (psychological 1.8200) or support just below from the 78.6% fibo of 1.8090-1.8539 at 1.8185 could offer lead to a bounce.  As is the case with EUR/USD, oscillators on the hourly are extremely oversold (RSI < 20).  Resistance would be at the mentioned 1.8308.  Additional resistance on a break below 1.8185 is suggested by the 6/23 low at 1.8132 as well as the 6/29 low at 1.8090.       

USD/CHF - The US dollar has beat up on the Swiss Franc as well.  USD/CHF has blasted through the 1.2400 figure.  The 5 waves up from 1.1919 to 1.2525 and 3 waves down from 1.2525 to 1.2190 paints a bullish picture.  As such, moves down are viewed as corrective and moves up impulsive.  However, it takes a break above the 1.2525 (next resistance) high to aggressively become bullish and proclaim that an important low is in place at 1.1919.  The common theme this morning is the overextension of these recent moves.  Hourly RSI on USD/CHF is > 80 and some weakness to correct the move to 1.2470 is needed to return to health to the market.  Look for support at former resistance from the 7/5, 7/12, and 7/14 daily highs from 1.2356/77.    

USD/CAD - The bias remains bullish for USD/CAD as the pair looks to have completed a correction of strength to 1.1399 at 1.1255.  USD/CAD may be in a 3rd wave advance to test fibo extensions of 1.1039-1.1399 at 1.1752 or 1.1837.  3rd waves are usually fast.  More immediate resistance is at the 1.1399 high and the 61.8% of 1.1771-1.0927 at 1.1449.  Initial support remains at Friday's low of 1.1255.  A supporting trendline that connects the lows at 1.0927, 1.0960, and 1.1039 comes in at around 1.1080 and must hold any contra moves in order to keep the larger bullish bias.  The trendline increases by roughly 4 pips per day.   

AUD/USD - Aussie found support near Friday's .7481 low at .7472.  A series of highs from 7/4 through 7/6 (.7468/72) makes a support zone but a break below would turn prospects more bearish and fuel a move down to test the 7/5 low at .7398.  Also, the confluence of the 10 and 50 day SMAs at .7490/91 has been support but seems to be giving way now with prices briefly spending time below.  Short term (hourly) oscillators are nearing oversold territory and a bounce seems reasonable.  Resistance stems from the 61.8% fibo of .7565-.7472 at .7529.    

NZD/USD - Kiwi is very little changed.  The pair has been able to push past yesterday's high at .6199 but the rise has been uninspiring.  The hourly chart shows bearish divergence with the last 5 highs that the pair has made.  Momentum is obviously slowing and volatility is contracting - a characteristic sometimes seen before turning points.  There is still potential for a spike to the confluence of the 61.8% fibo of .6431-.5927 / 6/16 high at .6237/46.  Kiwi also currently tests a resisting trendline that began in December 2005 (see chart below).  Additional evidence of a near term top is the structure of the advance from .5927.  The rally is currently in a 3rd corrective wave and a possible end would be where the 3rd wave equals the price length of the 1st wave.  The first wave is from .5927 to .6120 and the 3rd wave begins at .6025.  The math then works out to .6025 + (.6120-.5927) = .6218.  Today's high is at .6211 - which is very close to our measured objective.

Jamie Saettele is a Technical Currency Analyst for FXCM.