EUR/USD ââ,¬â€œ The EURUSD rally has stalled at the 50% fibo of 1.2938-1.2723 at 1.2830 this morning.  Hourly RSI is declining from near 70 and additional fibo resistance from the 61.5% at 1.2855 may limit upside potential.  It is possible that the decline from 1.2938 to 1.2723 is the first of a 3 wave corrective pattern to correct the 1.2456-1.2938 rally.  Thus, this rally from 1.2723 is the second wave and would be followed by a one more leg down before the resumption of the larger uptrend.  Support is at the 8/15 low at 1.2693 as well as the 61.8% fibo of 1.2456-1.2939 at 1.2641.   

USD/JPY ââ,¬â€œ The USDJPY has declined from the 8/25 high at 117.40 to just above 116.50 this morning.  Additional weakness to a trendline from 113.95 is possible (near 116.25) but oversold conditions on the hourly may limit the downside.  Also, the decline from 117.40 is in 3 waves.  As such, the decline may be nearing its terminus.  Still, a break below the aforementioned trendline targets the 38.2% fibo of 113.92-117.40 at 116.07. 

GBP/USD ââ,¬â€œ Cable has soared above 1.9000, but made a double top in the process with the 8/16 high at 1.9023.  Additional resistance is at the 78.6% fibo of 1.9144-1.8775 at 1.9065.  The pattern has become a bit clearer over recent days.  It looks like the rise from 1.8775 to 1.9027 (tonightââ,¬â"¢s high) is the second of a 3 wave correction.  Thus, what should follow is the third wave.  This decline could be violent and take the pair to where wave 3 (beginning at 1.9027) would equal wave 1 (1.9144-1.8775) at 1.8658.  However, there is no evidence of a top at 1.9027 although bearish divergence with hourly oscillators favors the downside. 

USD/CHF ââ,¬â€œ USDCHF continues to range primarily between the 1.2300 and 1.2400 figures ââ,¬â€œ most recently bouncing off of the 1.2300 figure this morning.  A continued bounce targets todayââ,¬â"¢s high at 1.2373.  Weakness below the 1.2300 figure exposes the 61.8% fibo at 1.2274.  The bias right now is a neutral one as the pair is stuck in the mentioned range.  However, hourly is rising from below 30 and may attract buying.   

USD/CAD ââ,¬â€œ As we have expected, USDCAD continues to weaken.  The pair appears to be tracing out the 3rd wave of a correction from 1.1456.  Where might this correction end before buying returns?  The 3rd corrective wave (beginning at 1.1319) would equal the first (1.1456-1.1170) at 1.1033.  This is significant because the 78.6% fibo of 1.0927-1.1456 is at 1.1040 (just 7 pips away).  This fits with the notion that initial moves at turning points are often retraced a large amount before a continuation.  The initial move in this case is 1.0927-1.1456.  USDCAD fell to 1.1049 last week and Fridayââ,¬â"¢s candle is a spinning top at the lower Bollinger band (daily).  The evidence points to a rally from nearby levels.  However, a break below 1.1040 exposes the 6/12 low at 1.0960. 

AUD/USD ââ,¬â€œ As we have focused on in recent commentary, the longer term bias is a bearish one as evidenced by the break of the supporting trendline from.7270.  The last two dayââ,¬â"¢s rallies have propelled the Aussie to just above the 61.8% of .7670-.76549 at .7624.  The 78.6% fibo is at .7644 and would be additional resistance.  The bearish argument strengthens immensely on a break below last weekââ,¬â"¢s low at .7549.

NZD/USD ââ,¬â€œ Kiwi has blown by resistance levels and trades just below the 8/16 high at .6439.  Recently declining oscillators from extreme (or near extreme) levels favor a reversal to lower but a push above .6439 would destroy bearââ,¬â"¢s hopes.  As is with the case with other pairs right now, overbought hourly conditions would seem to limit near term upside potential.  Initial support is at the 8/28 high at .6389. 

Jamie Saettele is a Technical Currency Analyst for FXCM.