Daily Forex Analysis – May 29, 2009

USDJPY Analysis.
USDJPY breaks above 96.69 resistance and reaches as high as 97.23 level. Consolidation in a range between 95.50 and 97.23 is expected in a couple of days, and further rally to 98.00 is possible after consolidation. Key support is now located at 95.50, below this level will indicate that a short term cycle top has been formed at 97.23 level on 4-hour chart, and the fall from 97.23 is treated as resumption of downtrend, then deeper decline could be seen to re-test 93.85 support.

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EURUSD Analysis.
EURUSD rebounds from 1.3793 level. Range trading between 1.3793 and 1.4050 is now in favor. As long as 1.4050 resistance holds, we’d expect lengthier consolidation to continue and one more fall to test the support of the lower border of the price channel on 4-hour chart is possible. On the other side, the rise from 1.3793 could possibly be resumption of uptrend, and a break above 1.4050 previous high will confirm such case, then the next target would be at 1.4200 level.

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USDCHF Analysis.
USDCHF drops sharply from 1.0953 and reaches as low as 1.0788, suggesting that a short term cycle top has been formed on 4-hour chart and the sideways consolidation from 1.0810 has terminated. Now the fall from 1.0953 is treated as resumption of downtrend from 1.1740. Further fall is now in favor and the next target would be at 1.0600 zone. Near term resistance is at 1.0953, as long as this level holds, downtrend will continue.

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AUDUSD Analysis.
AUDUSD is testing 0.7890 previous high resistance. As long as this level holds, the price action from 0.7890 is treated as correction of the uptrend from 0.7450 and one more fall to test 0.7668 key support is possible. However, above 0.7890 level will indicate that the uptrend from 0.7450 has resumed, and further rally could be seen to 0.8000-0.8100 area.

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GBPUSD Analysis.
GBPUSD is forming a short term cycle top at 1.6085 level on 4-hour chart. Pullback to test 1.5777 key support is possible later today, a break down below this level will confirm the cycle top, and then deeper decline could be seen to 1.5650 level. Near term resistance is located at 1.6085, above this level will indicate that the uptrend from 1.5059 has resumed, and then further rally is expected to 1.6300 level.

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USDCAD Analysis.
USDCAD is testing 1.1098 support. As long as this level holds, we’d expect sideways consolidation to continue. However, below this level will suggest that a short term cycle top has been formed at 1.1257 level on 4-hour chart and the downtrend from 1.1814 has resumed, and then deeper decline could be seen to 1.0800 level.

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