EUR/USD - As we mentioned yesterday, "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."  3rd waves of corrections tend to be destructive and the recent price action supports this.  Price has dipped below the 1.2500 figure today but has failed to test the previous low from 7/18 at 1.2481.  1.2481, combined with the 38.2% fibo of 1.1640-1.2977 at 1.2467 is the next support zone.  After falling below the 20 day SMA last Friday, MACD crossed below the 0 line - both of these developments are in line with the larger bearish outlook.  Bullish divergence with oscillators on the hourly points to the possibility of some relief for euro bulls before the next.

USD/JPY - USD/JPY broke above a resisting trendline from the 121.38 high back in December 2005.  Still, the pair may have completed a 5 wave rally to 117.28 and therefore a correction would be due.  The bearish divergence with oscillators at the recent high favors a correction.  Notice that we mention correction though.  The daily close above the trendline along with price > the 200 day SMA favor a longer term bullish scenario.  Another interesting observation is that USD/JPY hit the upper Bollinger band on the daily yesterday.  This can sometimes present a reversal opportunity but it also means that the market in question has been unquestionable strong.  Just a glance at the chart below shows the tendency of USD/JPY to continue in the direction of the trend after touching the upper or lower Bollinger bands (daily) after a minor correction.

GBP/USD - Cable dipped below the 1.8200 figure yesterday but has rallied back to test 1.8250.  RSI on the hourly has shot up above the midpoint of 50 but resistance is just above at the 38.2% fibo of 1.8466-1.8176 at 1.8285.  A test higher would run into the confluence of the 7/12 low / 50% fibo at 1.8308/20.  Like EUR/USD, Cable is likely in a C wave decline of strength to 1.9025.  Since waves 1 and 3 (A and c) of a correction tend to be similar in length, it is probable that this decline persists until at least 1.7604 (1.8539- (1.9025-1.8090)).  A resisting trendline has formed and currently is at around 1.8445 but declines roughly 11 pips per day.          

USD/CHF - USD/CHF has rallied to test the former resistance area just above the 1.2500 figure and thus far has failed.  Hourly RSI has descended from above 70 but we could certainly see another rally to test the 1.2525 high (6/23) in an exhaustion rally before a deeper retracement ensues.  The slip from today's 1.2506 high is viewed as corrective and initial support comes in at the 6/20 high of 1.2435.  A break above the 1.2525 high would expose the 50% fibo of 1.3281-1.1919 at the psychological 1.2600 figure.  The move higher likely has plenty left in the coming days as evidenced by CCI.  In fact, notice that over the last year (in the chart below), each time CCI hits 100, USD/CHF still has one more last thrust before a deeper correction.  CCI is currently at 97.12.  This is true for the other pairs as well.   

USD/CAD - After testing the 1.1370 area and forming a short term double top, USD/CAD appears headed down to complete a correction of the breakout strength to 1.1398.  Weakening oscillators on the hourly support this opinion.  Support is at yesterday's low at 1.1255 along with the zone where the third wave of the correction (beginning at 1.1374) would equal the first wave of the correction (1.1398-1.1255) at 1.1230.The bigger picture is bullish unless 1.1039 is broken to the downside.  Price above 1.1039 keeps intact higher lows.

AUD/USD - The Australian dollar has held its own and erased most of the losses incurred yesterday against the US dollar.  The pair broke above a short term resisting trendline (from the 7/13 high at .7565) but is approaching  resistance from the confluence of the 7/10 and 7/17 highs / 61.8% of .7565-.7464 at .7526/37.  The proximity of this level and the ability of the pair to hold at this level previously offers favorable reward:risk opportunities.  A break above .7530 probes the high on 7/13 at .7565.       

NZD/USD - Kiwi has taken off; blasting through resistance levels from previous highs, previous lows, and Fibonacci levels.  MACD on the daily has crossed to positive and CCI is nearing the 100 level (USD/CHF comments above are relevant).  Hourly RSI is extremely overbought at > 80 but this is not enough in and of itself to proclaim that a correction is due.  Significant resistance on a daily basis is not until the 78.6% fibo of .6428-.5927 at .6321.  Reinforcing a bullish outlook is the break of a nearly 7 month resisting trendline.

Jamie Saettele is a Technical Currency Analyst for FXCM.