Daily Forex Analysis – January 21, 2010

GBPUSD Analysis.
GBPUSD formed a short term cycle top at 1.6456 level on 4-hour chart. Range trading between 1.6210 and 1.6456 is expected later today. As long as 1.6210 key support holds, the price action from 1.6456 could be treated as consolidation of uptrend from 1.5829 and one more rise towards 1.6550 is still possible. However, a breakdown below 1.6210 level will indicate that the rise from 1.5829 has completed at 1.6456 level already, then the following downtrend could bring price back to re-test 1.5829 previous low support.

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USDCAD Analysis.
USDCAD broke above 1.0413 key resistance, suggesting that a short term cycle bottom has been formed at 1.0224 level on 4-hour chart, and the downtrend from 1.0745 has completed already. Uptrend is expected to continue after a minor consolidation and next target would be at 1.0550-1.0600 area. Supports are at 1.0420 and 1.0375.

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USDCHF Analysis.
USDCHF bounces sharply to as high as 1.0462 level. Further rally is expected to test 1.0507 in a couple of days. Initial support is at 1.0420 followed by 1.0375, as long as these levels hold, uptrend from 1.0132 will continue.

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AUDUSD Analysis.
AUDUSD continues its bearish movement and the fall from 0.9327 extends further to as low as 0.9072 level. Deeper decline is still possible in a couple of days and next target would be at 0.9000 area. Initial resistance is at 0.9130 followed by 0.9170.

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EURUSD Analysis.
EURUSD drops sharply to as low as 1.4082 level. Deeper decline is still possible after a minor consolidation and next target would be at 1.4000 area. Resistance is at 1.4150 followed by 1.4210, as long as these level hold, downtrend from 1.4579 could be expected to continue.

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USDJPY Analysis.
USDJPY is forming a short term cycle bottom at 90.31 level on 4-hour chart. Further rally is expected to test 92.04 key resistance later today. A break above this level will confirm the cycle bottom and indicate that the uptrend from 84.82 (Nov 27, 2009 low) has resumed, then another rise towards 95.00 could be expected. Initial support is at 90.75 and key support is at 90.31, only fall below these levels could bring price back to downtrend, and then next target would be at 89.50 area.

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