EUR/USD – We are still looking for price to come under last week’s low at 1.3541 to more strongly signal that a top is in place. This level is reinforced by 2 month trendline that is just above 1.3550 (20 day SMA is also at 1.3553). Oscillators on the daily are bearish as RSI has rolled over from above 70 and a bearish MACD crossover occurred Tuesday. Near term, it is possible to count a 5 wave decline from 1.3677 and the rally from 1.3559 looks corrective and may be playing out as a double zigzag. In this case, we would see one more small down-up scenario before a bigger decline takes place. The next level of short term resistance is the 61.8% at 1.3632.

USD/JPY – The USDJPY has chopped lower from yesterday’s high at 120.28 in quiet trading. Resistance is at the 78.6% of 122.17-115.14 at 120.67. A potential resistance line drawn off of the 3/12 and 4/16 highs is near 120.50. Bigger picture, the entire rally from 115.14 takes on a wedge shape, which is a bearish pattern. We are looking for the USDJPY to chop higher to 120.50/67 – after which reward/risk will favor shorts.

GBP/USD – Cable has come under trendline support but the short term double bottom at 1.9864/66 keeps shorts on the defensive at the moment. The 100% extension of 2.0131-1.9864 / 2.0071 at 1.9804 is a measured objective following a break under 1.9864. A decline much below there targets the 161.8% extension at 1.9639. A decline to 1.9804 or 1.9639 could be the C wave in an A-B-C decline from the top. An intraday reaction high at 1.9968 is initial resistance.

USD/CHF – As mentioned yesterday, “the longer term wave structure is bullish as the decline from 1.2571 is a double zigzag (inverse of the EURUSD rally). A longer term inverse head and shoulders pattern (May 2006, December 2006, April 2007) is also visible.” Still, a break above the trendline drawn off of the 2/12 and 4/9 highs is required to clear the way for higher prices. The USDCHF has reversed off of this trendline, sending the USDCHF back below 10 and 20 day SMAs – making longs a daunting proposition.

USD/CAD – The USDCAD is unchanged from yesterday. “There is little doubt that the decline from 1.1825 is a 3rd wave. Therefore, any rally should be treated like a correction as a 5th wave decline will eventually take the USDCAD to lower levels. Initial resistance is the 4/24 high at 1.1246. With RSI putting in a momentum extreme on 4/25 at 19.91 (daily), downside potential looks limited as the next few weeks may be dominated by sideways/corrective trading in order to correct the oversold condition (daily). The next support level is the 9/01/2006 low at 1.1028 followed by the 261.8% extension of wave 1 (1.1879-1.1562) – at 1.1000.”

AUDUSD – The AUDUSD has come under the 20 day SMA and briefly traded below .8233 (last week’s low) yesterday. Weekly RSI is divergent and above 70 for the first time since November 2004. The rally from .7678 is an extended 5th wave, which are often fully retraced. Near term resistance is at the 10/20 day SMA confluence at .8290/93 and bearish potential is strong below there. We are showing the weekly chart this morning as it illustrates the longer term turn possibility.

NZD/USD – The resistance from the yearly trendline and the bearish MACD crossover (daily) along with daily RSI declining from above 70 suggest that we look lower but a break below .7348 is required before we can get aggressively bearish against .7491. Former resistance at .7313 is now potential support. Short term resistance is at the 5/1 high of .7445.

Jamie Saettele is a Technical Currency Analyst for FXCM.