Daily Forex Analysis – January 20, 2011

GBPUSD Analysis.
GBPUSD may be forming a cycle bottom at 1.6058 level on 4-hour chart. Consolidation in  a range between 1.5800 and 1.6058 would likely be seen in a couple of days. As long as 1.5800 level holds, uptrend could be expected to resume and one more rise towards 1.6298 (Nov 4, 2010 high) is still possible and a break above 1.6058 could signal resumption of uptrend.

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EURUSD Analysis.
EURUSD broke above 1.3497 key resistance, suggesting that the longer term downtrend from 1.4281 (Nov 4, 2010 high) had completed at 1.2874 already, and the pair is now in uptrend from 1.2874. Further rise is expected after a minor consolidation and next target would be at 1.3800 area.

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USDCHF Analysis.
USDCHF’s downward movement extended to as low as 0.9520 level. Resistance is now at 0.9650, as long as this level holds, downtrend from 0.9783 could be expected to continue, however, a break above 0.9650 will indicate that a cycle bottom is being formed on 4-hour chart, then further rise to test 0.9783 resistance could be seen.

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AUDUSD Analysis.
AUDUSD remains in uptrend from 0.9803 and the rise extended to as high as 1.0076 level. Support is at the rising trend line on 4-hour chart, now at 0.9910, as long as the trend line support holds, uptrend could be expected to continue. Key support is at 0.9855, only break below this level could trigger another fall towards 0.9600 area.

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USDJPY Analysis.
USDJPY stays in a falling price channel on 4-hour chart and remains in downtrend from 83.68. As long as the channel resistance holds, downtrend could be expected to continue. However, a clear break above the channel resistance will indicate that a cycle bottom is being formed on 4-hour chart, then further rise to test 83.68 resistance could be seen.

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USDCAD Analysis.
USDCAD formed a cycle bottom at 0.9836 level on 4-hour chart. Range trading between 0.9836 and 1.0033 could be seen in a couple of days. As long as 1.0033 resistance holds, the price action in the range is treated as consolidation of downtrend from 1.0207, and another fall towards 0.9600 is still possible.

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