Dollar Loses Steam - But For How Long?

• Euro Turns on a Dime at 1.3200
• Japanese Yen Stalls at Support at 120.60
• British Pound Maintains Ascending Triangle Formation
• Swiss Franc – Will 1.2300 Hold?
• Canadian Dollar – Can USDCAD Break Below 1.1600?
• Australian Dollar At a Standstill Below Resistance
• New Zealand Dollar Double Top?

EURUSD – EURUSD has backed off from heavy resistance at the psychologically important 1.3200 level, though daily and 240 minute oscillators remain bullish. Should the pair manage to break higher once again, price could target the 78.6% fibo of 1.3367-1.2865 at 1.3261. However, EURUSD has had a tendency lately to hold tight ranges, so it would be quite possible to find the pair continuing to hold between 1.3100-1.3200, with a break of the 2/22 low at 1.3080 signaling a more bearish bias.

USDJPY – On Friday we said, “The USDJPY surge from 118.99 has continued to barrel on in what could be a resumption of the longer term uptrend, but with the recent rally a bit overextended, the pair has just encountered resistance at the 78.6% fibo of 122.21-118.99 at 121.52. With 240 minute RSI coming down from overbought levels, shorter term slides lower should find support at the 38.2% fibo at 120.22.” The pair’s retracement lower has paused instead at the 38.2% fibo of 117.98-122.21 at 120.60. Further declines find support at the noted fibo at 120.22, but another rally would target the 2/22 and 2/23 highs of 121.66. For more on the USDJPY long-term picture, see

GBPUSD – The picture for GBPUSD has not changed from Friday when we said, “Cable price action retains its upward bias for the time being as the pair has managed to stay afloat above the supporting trendline of an ascending triangle, which is typically a bullish formation. Thus, the next move could be a rally towards resistance at the 2/15 high of 1.9680. However, a break below the noted supporting trendline would negate the bullish bias.”

USDCHF – On Friday we said, “Oscillators on the daily charts remain bearish and declines in price may test the recent lows and a supporting trendline which currently stands at 1.2306.” USDCHF has held above this supporting trendline, and while the pair looks bearish on the daily charts, with CCI at extreme levels, price could see short term bounces back towards the 1.2400 level.

USDCAD – We said on Friday that “1.1600 has proven to be key support and will need to be broken with conviction and held below those levels before price can make their way lower.” USDCAD is currently struggling with the level, especially as the 100 SMA looms below at 1.1539. Another bounce higher targets resistance at the 2/20 and 2/21 highs at 1.1716/19, but we’ve also noted before that this could be a wave 3 move, meaning that powerful declines could be in store. With daily oscillators either extreme or bearish, USDCAD may finally be able to break the 1.1600 level to target the 50% fibo of 1.1028-1.1879 at 1.1455.

AUDUSD – The Aussie rally has stalled at the 78.6% fibo of .7982-.7694 at .7941 and just below the 1/23 high of .7941. Nevertheless, CCI (21) maintains extreme levels above 100 and a sustained break higher targets record highs just above .8000. However, if this is in fact a short-term top, price could easily collapse back down to the .7800 level.

NZDUSD – Similar to the Aussie, Kiwi’s rally has stalled at resistance as price action on the hourly charts have come to a standstill. Should NZDUSD turn over at this level, the pair would form a double top at .7100, which would signal an extremely bearish bias for the pair towards the 2/2 low of .6769. However, Kiwi is no stranger to extended surges higher, so a break above resistance to the 12/5/05 high of .7202 is not out of the question.