Daily Forex Analysis – December 9, 2008

USDJPY Analysis.
USDJPY breaks above 93.68 key resistance, suggesting that a short term cycle bottom has be formed at 91.59 level on 4-hour chart. Further rally could be seen to 96.00 zone in a couple of days. Initial support is now located at 91.59, only fall below this level will signal deeper decline to retest 90.92 (Oct 24 low) support.


GBPUSD Analysis.
After testing 1.5069 resistance, GBPUSD pulls back from 1.5048 level, suggesting that a short term cycle top is being formed. Further fall is expected later today, and a break below 1.4466 support will confirm the cycle top and signal resumption of down trend. However, above 1.5069 will indicate lengthier consolidation of long term down trend is underway, and further rally to retest 1.5534 resistance could be seen to follow.


EURUSD Analysis.
EURUSD is testing the resistance of the down trend line from 1.3290 (Oct 30 high) to 1.3080. If the trend line resistance gives way, the next target would be at 1.3080. A break above 1.3080 level will signal further rise towards 1.3500 zone. However, pullback would more likely be seen before breaking above the trend line resistance.


USDCHF Analysis.
USDCHF breaks above 1.2198 resistance, and reaches 1.2249 level only, suggesting that the pair is back to range trading between 1.1828 and 1.2296. Moving without trend in this range is expected in a couple of days. The price action from 1.2296 is treated as consolidation of long term up trend, as long as 1.1828 support holds, we’d expect up trend to resume, and further rally could be seen to 1.2500 zone after consolidation.


AUDUSD Analysis.
AUDUSD breaks above 0.6617 resistance and reaches as high as 0.6690 level. Further rise is still possible to 0.6800 zone later today. As long as 0.7014 (Nov 4 high) resistance holds, we’d expect down trend to resume, and one more fall is expected to follow. However, above 0.7014 will indicate that the down trend from 0.9849 (July 15 high) has completed.


USDCAD Analysis.
USDCAD breaks below the support of the up trend line on 4-hour chart, and reaches as low as 1.2446 level. Further fall is still possible to test 1.2125 previous low support in a couple of days. Initial resistance is now at 1.2650, as long as this level holds, down trend will continue.


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