EUR/USD ââ,¬â€œ The EURUSD remains above the short term support line that began on 11/21 ââ,¬â€œ which keeps the bias a bullish one.  However, the advance from the 11/17 low at 1.2762 is in 5 waves and extended.  Daily oscillators remain extreme as well with CCI above 100 and RSI above 70.  The combination of this evidence limits near term upside potential.  A decline below the 12/1 low at 1.3219 suggests that a decline towards 1.3130 is underway.

USD/JPY ââ,¬â€œ The short term bearish flag in the USDJPY did play out Friday as the pair declined to 114.95.  The rally since has traced out a very small 5 waves ââ,¬â€œ which warrants a bullish stance against 114.95.  In the short term, a rally above 115.82 could trigger a much more pronounced advance towards the 11/30 high at 116.54.  A drop below 114.95 negates the near term outlook and shifts focus to the 8/4 low at 113.95.

GBP/USD ââ,¬â€œ Cable appears to be nearing the end of a 5 wave bullish sequence from 1.7046.  The 5th wave of this advance began on 10/11 at 1.8515 and is likely near the end of its 3rd wave.  Thus, what is left is a corrective move lower and perhaps one more high above 1.9846 before a multi month decline begins to correct the advance from 1.7046.  Fibo support begins at the 38.2% of 1.8834-1.9846 at 1.9461.  Support at that area is reinforced by the 11/27 gap opening high at 1.9463.

USD/CHF ââ,¬â€œ The USDCHF declined to just below the 5/15 low of 1.1919 last week.  While the potential remains for another dip below the 1.1900 figure to complete the decline from 1.2769, bullish divergence with daily oscillators at the 1.1898 Friday low suggests that the next move of consequence is up.  Initial resistance is at the 11/29 high at 1.2116.  A decline below 1.1898 shifts focus to the 4/29/2005 low at 1.1837.

USD/CAD ââ,¬â€œ The larger uptrend remains in place above the support line drawn off of the 9/1, 9/28 and 10/30 lows.  However, the rally from 1.1303 has stalled and short term highs in price are accompanied by lower oscillator values (divergence).  Still, only a decline below the mentioned supporting trendline suggests the potential for a significant downside move.  That line is at 1.1266 today and increases 4 pips per day.  The next bullish target would be the 11/21 high at 1.1493.

AUD/USD ââ,¬â€œ Fridayââ,¬â"¢s a bearish reverse hammer candle warns of a pending correction of the nearly vertical move higher.  Similar to other majors, daily studies remain overbought and reinforce the need for a move lower.  Potential support is at the 38.2% of .7613-.7921 at .7804 (the 10 day SMA is at .7807 today as well).  A continued advance targets the 3/8/2005 high at .7988.

NZD/USD ââ,¬â€œ The Kiwi is currently challenging the 61.8% of .7461-.5927 at .6875.  The hourly is similar to that of AUDUSD, as the recent high is accompanied with bearish oscillator divergence.  The advance from the 11/30 low at .6774 takes the shape of a diagonal triangle ââ,¬â€œ an inherently weak pattern that is often fully retraced.  However, possibility remains that a sharp advance through the top of the triangle occurs prior to the decline.  In this case, resistance would rest at the 1/16 high at .7000.

Jamie Saettele is a Technical Currency Analyst for FXCM.