• Euro price action testing bearish conviction
• Dollar/Yen continues to focus on retest of 93.55-85
• Cable well bid on dips and trades back to range highs
• Dollar/Swiss setbacks seen limited to mid-1.0700's
• Dollar/Cad adhering to bull channel off 2009 lows
• Australian Dollar Rallying to Test Falling Trend-Line Resistance
• New Zealand Dollar well capped below 0.6500

EUR/USD

EUR/USD - The market has been locked in some sideways trade since breaking below the neckline of a major head & shoulders top formation on June 15. However, we classify the recent price action as a bearish consolidation and look for an eventual break lower below 1.3850 to confirm our outlook and expose the measured move h&s objective by 1.3250. An ideal lower top is now sought out below 1.4210 (78.6% fib retrace of 1.4340-1.3750), with only a break above to negate and give reason for pause. Strategy: SIDELINED FOR NOW; LOOK TO SELL (We recommended a sell @1.4205 with an OPEN target and 1.4355 stop, but don't expect the trade to trigger)

USD/JPY

USD/JPY - For now, it looks like the market is content on trading within a broad range, loosely defined between the 94.00-100.00 area. With the price now gravitating to the bottom of the range, there is scope for additional weakness down towards the 93.55-85 over the coming days. Only back above 96.60 would delay bearish outlook. Strategy: STAND ASIDE; AWAIT CLEARER SIGNAL.

GBP/USD

GBP/USD - The breakdown that we have been anticipating over the past several days is taking longer to materialize, with the market caught in some sideways consolidation. However, any rallies have been well capped below the 2009, 1.6665 lows, with failed attempts resulting in lower tops by 1.6620 and most recently by 1.6605 on Wednesday. Key support comes in by the consolidation lows at 1.6185 with a break and close below to accelerate declines towards the critical 1.5800 neckline of what would be a very awkward topping formation. Only back above 1.6600 would negate and give reason for shift in outlook. Strategy: SIDELINED FOR NOW; LOOK TO SELL

USD/CHF

USD/CHF - We had been writing of a potential inverse head & shoulders pattern on the daily, following the establishment of a 2009 low by 1.0590 on June 2. Although this didn't play out as we had hoped, the market was successfully propped ahead of 1.0590 on Wednesday, before a jackknife reversal back above the 1.1000 neckline. The result, has been the formation of more of a double bottom-like pattern which confirms the prospect for medium-term basing and opens the door for fresh upside over the coming weeks back towards the 1.1500 area. Any setbacks are now expected to be well supported in the mid-1.0700's. Strategy: SIDELINED FOR NOW; LOOK TO BUY

USD/CAD

USD/CAD - Continues with the recovery from the 2009 lows posted by 1.0785 on June 1, reaching 1.1640 on Thursday ahead of the latest minor setbacks. However, any setbacks are seen as limited from here with the market adhering to a well defined bull channel. Look for a fresh higher low above 1.1220 and ideal in the 1.1400 area ahead of the next upside extension towards key medium-term resistance by 1.1820. Only back under 1.1200 would give reason for concern. Strategy: SIDELINED FOR NOW; LOOK TO BUY

AUD/USD

AUD/USD - Dips have been very well supported in the 0.7800 area and the market has chosen to enter a period of consolidation after posting fresh 2009 highs by 0.8265 in early June. We had been looking for a double top scenario in the previous weeks, but this has failed to play out with the consolidation negating the pattern formation. We still however retain a bearish bias and look for a lower top to carve out below 0.8240 ahead of the next major drop below 0.7825-50. Only back above 0.8265 negates outlook. Strategy: SIDELINED FOR NOW; LOOK TO SELL

NZD/USD

NZD/USD - The market has been in the process of consolidating the latest setbacks off of the 2009 highs by 0.6600 set in early June, with any rallies being well capped below 0.6500. The 0.6500 psychological barrier is also the 78.6% fib retrace off of the major 0.6600-0.6155 move and we continue to favor selling on rallies towards the figure in anticipation of an eventual resumption of setbacks back below 0.6155 over the coming days. A close above 0.6500 will however give reason for pause. Strategy: SIDELINED FOR NOW; LOOK TO SELL

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com. If you wish to receive Joel's reports in a more timely fashion, e-mail jskruger@fxcm.com and you will be added to the distribution list.

Joel Kruger publishes 6 daily pieces:

Tech Talk - A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)

Morning Slices - Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes Trade of the Day).
Monday-Friday (between 6:30am-7:30am EST)

Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)

Cross Country - A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
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Scandi Daily - A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)

Daily Classical - A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)