Daily Forex Analysis – December 16, 2008

USDCAD Analysis.
USDCAD is forming a short term cycle bottom at 1.2158 level on 4-hour chart. Key resistance is now located at 1.2513, a break above this level will confirm the cycle bottom and the following up trend will bring price towards 1.2900 zone. Initial support is at 1.2158, only fall below 1.2158 will signal deeper decline towards 1.1800.

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EURUSD Analysis.
EURUSD remains in up trend and the rise from 1.2549 extends to 1.3718 level. Further rise is still possible to 1.4000 zone in a couple of days. Initial support is at 1.3450 followed by 1.3250, as long as 1.3450 level holds, we’d expect up trend to continue.

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GBPUSD Analysis.
GBPUSD rebound sharply to as high as 1.5377 level. Further rise is still possible to test 1.5534 (Nov 25 high) key resistance, a break above this level will indicate that the long term down trend from 2.0158 (July 15 high) has completed. However, as long as 1.5534 resistance holds, we’d expect down trend to resume, and one more fall below 1.4466 previous low is still possible. Initial support is located at 1.4815, below this level will signal resumption of down trend.

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USDJPY Analysis.
USDJPY formed a short term cycle bottom at 88.53 level on 4-hour chart. Further rally is still possible to test 93.90 key resistance. A break above this level will indicate that the fall from 100.54 (Nov 4 high) has completed.

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AUDUSD Analysis.
AUDUSD is forming a sideways consolidation in a range between 0.6486 and 0.6797. Pullback would more likely be seen before breaking above 0.6797 resistance. However, above this level will signal further rally to retest 0.7014 (Nov 4 high) long term resistance.

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USDCHF Analysis.
USDCHF drops sharply to as low as1.1556 level. Deeper decline is still possible 1.1400 zone in a couple of days. Initial resistance is now located at 1.1750, as long as this level holds, we’d expected down trend to continue.

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