EUR/USD – The 5th wave of the 5 wave bearish sequence from 1.3367 is in progress and should take price below 1.2865. The 161.8% extension of 1.3367 – 1.3051 / 1.3296 is a bearish target at 1.2787. This potential support is reinforced by the 11/17 low at 1.2761 and the 200 day SMA at 1.2808. Another bearish target is the 61.8% extension of waves 1 through 3. This is at 1.2737. The minimum expectation is for price to dip to below 1.2865. Technically speaking, this would complete 5 down from 1.3367 and we would look for a 3 wave rally before the next leg down begins. On a very short term basis, 1.2948 should serve as resistance. A rally above there decreases confidence in the immediate bearish case.

USD/JPY – We still maintain our position regarding the longer term implications from the 13 month inverse head and shoulders pattern. A long term measured objective is at 128.67 – which is where the advance from 108.96 would equal the advance from 101.67 to 121.38. We have a shorter term measured objective at 123.21, which is where the rally from 117.97 would equal the 114.42-119.67 rally. However, the rally above 121.78 makes it possible to count 5 waves up from 117.97 so the USDJPY may be close to a short term top. The first sign that a top is in place would be a daily close below former resistance (now support) at 121.78.

GBP/USD – On January 23rd, we wrote “be on the lookout for a reversal lower. 5 waves up from 1.7046 and 5 waves up in the larger 5th wave position from 1.8090 suggest that a major turn lower is upon us.” On that very day, Cable topped at 1.9915. Weakness from 1.9915 is likely just the beginning of a much larger decline. Near term projected support is not until where the decline from 1.9736 equals the 1.9915-1.9645 decline. This is at 1.9461 (very close to the 1/9 high at 1.9455). A daily close below 1.9455 confirms the larger bearish outlook. In the short term, price below 1.9644 keeps the bear comfortable.

USD/CHF – The USDCHF rally to above 1.2546 confirms that the decline to 1.2375 on 1/23 was the bottom of a corrective wave 4. The next bullish target remains the 1.618 extension of 1.2271 – 1.1878 / 1.2110 at 1.2746. 1.2497 is initial support and price above there warrants an aggressive bullish stance. A dip below 1.2497 does not destroy the larger bullish structure but does merit a more cautious approach (technically…there are 5 waves up from 1.1878 but we think that this current 5th wave could extend to the mentioned measured objective of 1.2746). Only a decline below 1.2375 negates the bullish wave implications.

USD/CAD – The USDCAD continues to trade sideways at the top of its yearly range. The 1.618% extension of 1.0927-1.1456 / 1.1028 is at 1.1883. 1.1883 is an ideal topping area for the USDCAD before the pair resumes its longer term downtrend to below 1.0927. The potential 2+ year bearish channel reinforces resistance at the current juncture. The topping scenario is best served by one more rally to above 1.1850 in order to complete 5 small waves from 1.1644. A decline below 1.1644 suggests that the decline has already started.

AUD/USD – The AUDUSD is little changed following the break below the neckline of the head and shoulders pattern. The 1/10 low at .7759 is the breakdown point and now resistance. Focus is now on the 11/13 low at .7614. There is still the possibility that this decline from .7936 is the C wave of a an A-B-C correction from .7979. In this case, .7714 would be where the A and C waves would be equal. A daily close above .7759 would give the latter scenario more weight.

NZD/USD – The 7 month trendline remains the pivot in Kiwi. That line is at .6913 today and increases 7 pips per day. Nothing has changed regarding the short term wave structure. The rally from .6840 to .7034 was most likely an a-b-c correction of the .7096-.6840 decline. We are looking for a decline to challenge .6778, which is where the decline from .7034 would equal the .7096-.6840 decline. This measured objective intersects with the 11/29 and 11/30 lows. Price below .7034 keeps this analysis intact.

Jamie Saettele is a Technical Currency Analyst for FXCM.