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Daily Forex Analysis – August 31, 2010

USDCAD Analysis.
USDCAD rebounded strongly from 1.0471, suggesting that a cycle bottom is being formed on 4-hour chart. Another rise to test 1.0676 (Jul 6 high) key resistance is possible in a couple of days, a break of this level will confirm the cycle bottom, then further rise to 1.0750 could be seen. Key support is now at 1.0471, below this level will indicate that the uptrend from 1.0107 has completed at 1.06666 already, then the following downward movement could bring price back to 1.0200 zone.

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EURUSD Analysis.
Being contained by the upper border of the price channel on 4-hour chart, EURUSD pulled back from 1.2778, suggesting that another fall towards 1.2500 is underway. Key resistance is now at 1.2778, only break above this level could indicate that the fall from 1.3333 is complete.

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USDCHF Analysis.
USDCHF stays below the falling trend line from 1.0624 to 1.0450 and remains in downtrend, and the bounce from 1.0220 is treated as consolidation of downtrend. As long as the trend line resistance holds, downtrend is expected to continue and next target would be at 1.0100 area.

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AUDUSD Analysis.
AUDUSD’s bounce from 0.8771 extended to 0.9029 only, the subsequent fall suggests that a cycle top is being formed on 4-hour chart. Deeper decline towards 0.9771 would more likely be seen in a couple of days, a breakdown below this level will indicate that the downtrend from 0.9221 has resumed, then next target would be at 0.8600 area.

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GBPUSD Analysis.
GBPUSD remains in downtrend from 1.5997. As long as 1.5597 resistance holds, downtrend is expected to continue and next target would be at 1.5300 area. However, a break above 1.5597 will suggest that a cycle bottom has been formed at 1.5372 level on 4-hour chart, then further rise to test 1.5712 key resistance could be seen.

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USDJPY Analysis.
USDJPY failed to break above 86.37 resistance and pulled back from 85.89, suggesting that a cycle top has been formed on 4-hour chart. Now the fall from 85.89 could possibly be resumption of downtrend from 89.15 (Jul 12 high), another fall towards 82.00 would more likely be seen.

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