EUR/USD – The EURUSD rallied to the 61.8% fibo of 1.2938-1.2630 at 1.2820 but has again slipped below the 1.2800 figure.  Daily oscillators are mixed as MACD slope is negative but 22 day momentum is still negative.  The 38.2% of 1.2630-1.2830 is immediate support just below at 1.2754.  A break of the 9/19 high at 1.2725 instills confidence in the downside.  1.2820 is resistance and a push above there exposes the 8/31 high at 1.2880.

USD/JPY – The USDJPY broke below a 4 month trendline last week and is now correcting higher.  Daily oscillators are declining and favor bears.  Resistance is at the 38.2% of 118.28-116.11 at 116.93 and the 61.8% at 117.45.  The next bearish target is the 9/5 low at 115.55.  A break below the 3 month SMA, which is at 116.14, would bolster bearish prospects.  We would also like to highlight that COT data indicates reversal potential (to the downside).

GBP/USD – Cable has rallied to a previous congestion and topping area near 1.9070.  We mentioned Friday that “A topping scenario is favored now as well by hourly oscillators, which are overbought and exhibit divergence at current price.”  The pair appears to have topped, at least momentarily, and hourly RSI is now just above 50 (midpoint).  The extent of this rally from 1.8733 suggests that the pair is tracing out either a c wave or a 3 – the former would be a final rally to complete the correction of the 1.9091-1.8602 decline and the latter implies that there is one more rally left to complete the uptrend.  A break back below 1.8918 would begin to suggest that the rally is over and that the path of least resistance is down.

USD/CHF – USDCHF slipped below the 1.2300 figure but reversed before the 4 month trendline, currently at 1.2272.  If the trendline holds, then a bullish ascending triangle formation is kept intact and scope would remain for a test of the 1.2525-1.2622 resistance zone.  It takes a break above the 9/19 low at 1.2482 for the bearish structure on the hourly to deteriorate.  A break below the aforementioned supporting trendline opens up the door for a test of the 8/21 low at 1.2182.

USD/CAD – The USDCAD just below the 61.8% of 1.1028-1.1294 at 1.1130 and has since rallied to just below the 1.1200 figure.  Wave structure remains bullish as the decline from 1.1294 follows a 5 wave rally from 1.1028 to 1.1294.  In addition, support at 1.1117 is reinforced by the 9/14 low at 1.1114.  A break above 1.1205 improves the outlook for bulls but it takes a dip below 1.1028 to negate bullish implications from the mentioned 5 wave rally.

USD/CAD – The USDCAD just below the 61.8% of 1.1028-1.1294 at 1.1130 and has since rallied to just below the 1.1200 figure.  Wave structure remains bullish as the decline from 1.1294 follows a 5 wave rally from 1.1028 to 1.1294.  In addition, support at 1.1117 is reinforced by the 9/14 low at 1.1114.  A break above 1.1205 improves the outlook for bulls but it takes a dip below 1.1028 to negate bullish implications from the mentioned 5 wave rally.

AUD/USD – AUDUSD pushed through the former high at .7573 momentarily last week but reversed course at .7583.  The pair has since traded down to the lower portion of its .7500-.7575 range.  The nearly two week consolidation has taken place following the decline from .7721, thus probability favors a break lower rather than higher.  The 9/13 low at .7481 remains support.  A break below .7481 exposes the 61.8% of .7270-.7721 at .7442.  Daily oscillators are declining and below midpoints, which favors bears.

NZD/USD – Kiwi has rallied to test a major resistance area at the confluence of the 50% fibo of .7462-.5927 / 61.8% fibo of .7199-.5927 at .6694/.6712.  Fibonacci resistance is reinforced by the 7/8/2005 and 12/23/2005 lows at .6683 and .6700.  Bearish divergence with oscillators on the daily and dealer charts favor a reversal to the downside.  A break below the 9/20 low at .6546 would suggest that a top is in place at .6707.  A push above .6707 exposes the 1/27 low at .6755.

Jamie Saettele is a Technical Currency Analyst for FXCM.