EUR/USD â�,�“ As we have concentrated on here in the last few weeks, 5 waves up can be counted from the November 2005 low at 1.1640, which means downside risk is high.  This morningâ�,��"�s weakness is impulsive and a break below 1.3200 would seriously damage the short term bullish structure.  Until then, upside potential does remain.  Still, 1.3200 looks especially attractive given the gap from 1.3204 to 1.3226, which is at least partially filled (at approximately 5:40 am).  Price action over the next day should clarify the short term picture.  Remember, 1.3204 is the bearish pivot.  21 day momentum is in negative territory for the first time since late October (bearish).  

USD/JPY â�,�“ The year long inverse head and shoulders pattern remains intact and a break above the neckline, a resistance line drawn off of 121.38 and 119.87, would warrant a longer term bullish bias.  That neckline is at 119.44 today and decreases about 4 pips per day.  From February to April, the 119.00 figure was solid resistance but this morningâ�,��"�s rally has sent the USDJPY right through the figure.  The pivot to watch is the neckline, drawn on the chart below.  Given the impulsive rally, any decline should be prove corrective and initial support comes in at 118.50.

GBP/USD â�,�“ Cable is in the exact same position as EURUSD.  The failure at 1.9750 is similar to the EURUSD failure at 1.3300.  The pivot to watch is the short term support line drawn off of the 12/18 and 12/26 lows.  That line is at about 1.9585 today.  On a larger scale, 5 waves up can be counted from the November 2005 low at 1.7046 â�,�“ so this could be the beginning of a much larger downturn.  1.9749 (todayâ�,��"�s high) is critical to the bearish case.  21 day momentum is negative for the first time since 10/25 when Cable was at 1.8771.

USD/CHF â�,�“ Due to â�,��"the 5 wave advance from 1.1878 to 1.2271â�,�¦the larger trend may have turned up and an important low may be in place at 1.1878.â�,�  1.2110 is a shelf of support and price has rallied above both the 10 and 20 day SMAs today.  A rally through 1.2271 exposes the 50% fibo of 1.2769-1.1878 at 1.2323.  1.2110 is critical to the bullish case.  If support at 1.2110 fails to hold, then focus shifts to the 61.8% fibo of 1.1878-1.2271 at 1.2029.

USD/CAD â�,�“ The break above 1.1636 negates the immediately bearish scenario that we proposed last week and instead shifts focus to the 4/3 high at 1.1771.  A short term trendline drawn off of the 11/28 and 12/20 lows keep the short term bias a bullish one.  That line is at about 1.1504 today and increases roughly 10 pips per day.  1.1578 is support prior to the trendline.  Overbought daily RSI warrants caution.

AUD/USD â�,�“ 5 waves up from .7413 along with bearish divergence with daily oscillators at this high suggest that the Aussie may be near a top.  The reversal this morning right before the .8000 figure is also bearish.  However, .7778 needs to be taken out before one is confident in a bearish scenario.  Interim support is .7929 and .7878 (both former resistance levels).

NZD/USD â�,�“ The Kiwi made a run at .7100 yesterday â�,�“ but stalled at .7096.  If a long term head and shoulders top is forming, then the left shoulder at .7098 may very well be resistance.  Chart congestion places resistance up until the 12/5 /2005 high at .7198.  Trendline resistance is just above at .7162 today (and increases about 5 pips per day).  Daily RSI declined below 70 today â�,�“ which could signal the beginning of a deeper decline.

Jamie Saettele is a Technical Currency Analyst for FXCM.