EUR/USD – Standing back and taking a look at the daily chart, it looks more and more like the decline from 1.3296 is a third wave in a 5 wave bearish sequence rather than a C wave in a 3 wave corrective sequence.  The point where the decline from 1.3296 would have equaled the 1.3367-1.3051 decline was 1.2980.  Yesterday’s low was 50 pips lower, thus an extended leg lower may be in the works.  If this is the case, then bearish targets are 1.2861 and 1.2787.  These points are where the decline from 1.3296 is 1.382 and 1.618 x the 1.3367-1.3051 decline.  This is also a previous congestion area.  If 1.2865 holds, then resistance comes in at the 12/22 low of 1.3051.

USD/JPY – The USDJPY has broken above the neckline from the 13 month inverse head and shoulders pattern.  The door is now open for an assault on the 125.00 figure and ultimately a measured objective at 128.67 – which is where the advance from 108.96 would equal the advance from 101.67 to 121.38.  Daily RSI is in overbought so managing risk is key here for longs.  On the other hand, RSI just entering extreme territory could mark the beginning of a much stronger move.  Support is former resistance at 119.67.

GBP/USD – We focused last week on how much more constructive Cable was compared to the EURUSD.  The pair has turned up in what looks like an extended 3rd of the 5th wave to complete the bullish sequence from 1.8515 (and the bullish sequence of one larger degree from 1.7046).  Thus, price is expected to exceed 1.9846 before a major correction takes place.

USD/CHF – The USDCHF has turned down from very close to where the 1.2110-1.2526 advance would equal the 1.1878-1.2271 advance.  Equal legs are indicative of corrections and the proximity of 1.2526 skews risk to the downside.  If 1.2526 is exceeded this week, then the impulsive numbered count would before preferred and focus would switch to the 138.2% and 161.8% extensions of 1.1878-1.2271 / 1.2110 at 1.2653/1.2746.  Initial support is at the 38.2% of 1.2110-1.2526 at 1.2369.

USD/CAD – The USDCAD may have turned down last week from a wave 4 correction last week.  Thus, a wave 5 may have started which would ultimately serve to complete the long term downtrend.  Daily RSI has turned over from above 70 – which is a strong reversal signal.  The high last week at 1.1800 is critical for the immediate bearish case.  A rally through 1.1800 negates the immediate bearish outlook.

AUD/USD – Last week’s commentary still stands – “The AUDUSD closed below the all-important .7778 (12/15 low) but the break lower proved false as the pair has rallied today to take out the previous two day’s highs.  Bullish pivots to watch are .7878 (12/20) high, .7929 (12/8 high) and ultimately .7979 (01/03 high).  False breakouts often lead to dramatic reversals in the other direction, which is what we may see here.  .7759 (yesterday’s low) is critical support for the bullish case.”

NZD/USD – Kiwi has stemmed its decline and the pair remains constructive as the rally from the .6840 low to .6938 is most likely wave A and the decline to .6859 wave B.  Wave B retracing 78.6% of wave A is typical of a flat pattern.  If a flat is unfolding, then Kiwi strength should persist until at least wave C equals wave A – which in this case would be .6956.  This level is just below the 50% retracement of .7096-.6840 at .6968.

Jamie Saettele is a Technical Currency Analyst for FXCM.