By DailyFX - EUR/USD * Euro bulls managed to launch a countermove against the dollar longs with the pair stalling around 1.1940, a level marked...

... by the 20-day SMA.

In case euro longs manage to push the pair higher, a move toward the psychologically important
1.2000 handle, a level defended by the 38.2 Fib of the 1.2588-1.1639 USD rally and
is further reinforced by the 50-day SMA will most likely see the single currency
lose the momentum of their advance and once against head toward 1.1865, a level
marked by the 23.6 Fib of the 1.2588-1.1639 USD rally. A further move on the part of
the dollar longs will most likely see the pair break lower and target euro's bids
around 1.1778, a level established by the December 30 daily low and with sustained
momentum to the downside most likely seeing the EUR/USD break below the 1.1704, a
level marked by the December 7 daily low. Indicators are favoring dollar longs with
both negative momentum indicator and MACD trading below the zero line, while neutral
oscillators give either side enough room to maneuver.



USD/JPY * Japanese Yen longs saw their advance stall below the 116.00 figure
following a week long anti-dollar rally. In case yen longs manage to continue their
advance, a further move to the downside will most likely see the pair move toward
the psychologically important 115.00 handle and target dollar bids around 114.80, a
level established by the 38.2 Fib of the 104.16-121.46 USD rally. A further move on
the part of the Japanese yen longs will most likely see the pair extend its decline
toward 114.00, a level defended by the 200-day SMA. However in case yen longs fail
to sustain momentum below 116.00, a subsequent reversal will most likely see the
greenback longs takeover the price action and with a move above 117.38, a level
established by the 23.6 Fib of the 104.16-121.46 USD rally most likely targeting yen
offers around 117.77, a level marked by the 20-day SMA. Indicators are mixed with
negative momentum indicator diverging from positive MACD above the zero line, while
neutral oscillators give either side enough room to maneuver.



GBP/USD * British pound longs launched a massive countermove against the dollar
longs and once against pushed the pair above the psychologically important 1.7500
handle, but failed to advance beyond the greenback offers around 1.7550, a level
defended by the 50-day SMA. In case pound longs fail to hold the pair above the
1.7500 figure, a reversal will most likely see the pair head toward 1.7468, a level
marked by the 20-day SMA and with a further collapse of the sterling offers
targeting 1.7391, a level defended by the 23.6 Fib of the 1.8500-1.7048 USD rally. A
further move to the downside will most likely see GBP/USD collapse toward 1.7312, a
level marked by the July 8 daily low and with sustained momentum on the part of the
greenback longs will most likely seeing the pair extend its decline 1.7200 figure
and target pound bids around 1.7188, a level established by the January 3 daily low.
Indicators are mixed with positive momentum indicator diverging from negative MACD
below the zero line, while neutral oscillators give either side enough room to
maneuver.



USD/CHF * Swiss Franc bulls joined the rest of the majors in a massive anti-dollar
rally and pushed the pair below the 1.3100 figure, but failed to reach the greenback
bids around 1.3041, a level established by the 23.6 Fib of the 1.2240-1.3285 USD
rally and is further reinforced by the 20-day SMA at 1.3060. In case greenback
traders manage to hold the pair around 1.3100 figure a reversal will most likely see
the pair head toward 1.3201, a level established by December 30 daily high. A
further move to the upside will most likely see the pair test Swissie's offers
around 1.3285, a level established by the 2005 high and with confirmed break above
the trading range's high will most likely see the pair aim for the next
psychologically important 1.3500 handle, a level defended by the Swiss Franc offers
around 1.3446, an October 17, 2003 daily high. Indicators are favoring the dollar
longs with both positive momentum indicator and MACD above the zero line, while
neutral oscillators give either side enough room to maneuver.



USD/CAD * Canadian dollar bulls remained in charge of the price action as USD/CAD
continued to set multi-year lows. As Loonie longs push the pair further a sustained
break below 1.1374, a level marked by the January 31 daily low will most likely see
the Canadian dollar trader push USD/CAD below the 1.1300 figure and target greenback
bids around at 1.1249, a level marked by the 1.00 Fib Extension of the Nov-Dec CAD
rally. A further move on the part of the Loonie longs will most likely see the pair
extend its decline toward the psychologically important 1.1000 handle, a level
defended by the 1.382 Fib Extension of the Nov-Dec CAD rally at 1.1040, thus seeing
the Canadian dollar enter into a trend mode. A break below 1.1000 will most likely
see the pair tumble further and test the US dollar defenses around 1.0910, a level
marked by the 1.618 Fib Extension of the Nov-Dec CAD rally. Indicators are favoring
Canadian dollar longs with both negative momentum indicator and MACD treading below
the zero line, while neutral oscillators give either side enough room to maneuver.



AUD/USD * Australian dollar bulls managed to push their US dollar counterparts
higher as the pair once against climbed above .7418, a level established by the 23.6
Fib of the .7798-.7236 USD rally. In case Aussie longs manage to gain upside
momentum, a further move to the upside will most likely see the pair extend its
rally toward .7528, a level marked by the .7798-.7236 USD rally and is further
reinforced by the 200-day SMA. However in case US dollar bulls launch a countermove
of their own, a move below .7400 figure will most likely see AUD/USD head lower and
test Aussie the bids around .7321, a level created by the November 24 daily low. A
further break below will most likely see the AUD/USD break .7300 figure and target
Aussie bids around .7234, a level defended by the December 27 daily low. Indicators
are mixed with positive momentum indicator diverging from negative MACD below the
zero line, while neutral oscillators give either side enough room to maneuver.



NZD/USD * New Zealand dollar longs managed to push the pair above the .6600 figure
and tested the US dollar offers around .6615, a level marked by the July 19, 2004
daily high. As greenback bulls resume their attack and push the pair lower, a
further move to the downside will most likely see greenback bulls test Kiwi's bids
around .6507, a level established by the 61.8 Fib of the .5914-.7466 NZD rally. A
confirmed break below the psychologically important .6500 handle will most likely
see the pair head lower and test the bids around .6414, September 4, 2004 daily low.
A sustained momentum on the part of the US dollar traders will most likely see the
pair extend its decline below the .6300 figure and target the New Zealand dollar
offers around .6246, a level defended by the 78.6 Fib of the .5914-.7466 NZD rally.
Indicators are favoring US dollar longs with both negative momentum indicator and
positive MACD above the zero line, while ADX above 25 at 31.46 signals an existence
of a trend, not a direction of one, with oversold Stochastic adding to a trending
outlook.




Trader's Corner:
As a trader one of the lessons I learned the hard way is to never let my emotions
and feelings interfere with my trading. Trading can be emotionally draining
experience for those who are not prepared for what can happen in the market. A
trader is constantly subjected to an avalanche of data, price action, volatility,
emotions and feelings of greed, fear, elation, joy and pain. Emotions and feelings
are an integral part of human nature, but can be very expensive luxuries a trader
can ill afford to hold on to, especially for a novice trader. In order to become
successful, a trader must learn self-control, he or she must put aside all of the
feelings and prejudices one had before becoming a trader. A successful trader must
always be in control of oneself, one's emotions and feelings. It is always important
to remember that it is a trader who runs a position, not the other way around,
because when the position begins to run a trader instead, that is where trader is
lost to the emotions and feelings and in turn that will lead to a devastating loss.
REMEMBER SELF-CONTROL IS KEY TO SUCCESS. Please fell free to email at
sshenker@fxcm.com with your comments.


By DailyFX