EUR/USD – The pair is back below the 7 month trendline and is approaching trendline support drawn through 1.2456 and 1.2630 at 1.2652.  A break below there represents the break of a 4 month triangle and could trigger heavier selling.  Longer term bearish signals are everywhere.  Daily oscillators are below midpoints and favor bears.  The EURUSD also broke below the 22 day and 66 day (1 and 3 month) moving averages yesterday.  The 9/22 low at 1.2778 is resistance and needs to hold in order to keep the short term wave structure bearish.

USD/JPY – The USDJPY broke out to the upside as the 66 day SMA held as support at 116.14.  Resistance going forward is at the 78.6% of 118.28-116.06 at 117.80 and the 9/18 high at 118.28.  There is considerable chart congestion until 119.38 (2/3 high).  Hourly RSI is divergent with the high at 117.39 this morning and near term strength looks limited.

GBP/USD – Price has dipped below the 9/14 high at 1.8918, which improves the bearish picture.  The pair has also just broken below a trendline drawn through 1.8602 and 1.8733.  Current price is supported by the 22 day SMA at 1.8891 but a break below exposes more formidable support from the 8/18 low / 61.8% of 1.8602-1.9072 at 1.8775/80.  A break below there is also a break of a nearly 6 month trendline.  This would be significant and clarify the technical picture.

USD/CHF – USDCHF is little changed as the pair has digested gains the past 24 hours, trading in a 40 pip range.  It appears that a bullish ascending triangle formation is forming and scope remains 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.  22 day momentum has turned up from its midpoint.

USD/CAD – The USDCAD is holding above the confluence of the 61.8% fibo of 1.1028-1.1294 / 9/14 low at 1.1114/30.  Long wicks below the bodies of recent daily candles denote strong support at this juncture.  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 – The Aussie continues within the .7481-.7573 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.  The 66 day SMA (3 month) has held as resistance since 9/11.  Support is reinforced by the 132 day (6 month) SMA but price is creeping below a 6 month trendline drawn through .7014 and .7270.

NZD/USD – Yesterday’s comments mentioned that “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.”  Kiwi has reversed, plummeting 122 pips yesterday from open to close.  A 100 pip move (open to close…up or down) has only occurred 53 times in the last 10 years (out of a possible 2,531 trading days).  What is interesting is that these moves almost always occur at the end of a big move or at the beginning of a big move.  The chart below labels the last 8 moves of 100 pips or more in a single day (open to close).  A B label denotes beginning and an E label denotes ending.  9/14 signaled that the end of the uptrend was near because the open to close move was greater than 100 pips.  Similarly, yesterday may have kicked off a new downtrend.

Jamie Saettele is a Technical Currency Analyst for FXCM.