Daily Forex Analysis – January 12, 2010

EURUSD Analysis.
EURUSD formed a short term cycle bottom at 1.4266 and bounced to as high as 1.4555. Further rally is still possible to 1.4650-1.4700 area. However, the pair could be forming a cycle top at 1.4555 level on 4-hour chart. Key support is now located at 1.4370, a break below this level will confirm the cycle top, then another fall to test 1.4218 previous low support could be seen to follow.

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USDJPY Analysis.
USDJPY broke below the rising trend line from 87.37 to 91.25. Deeper decline is expected to test 91.25 key support. A breakdown below this level could indicate that the uptrend from 98.37 has completed at 93.75 already, then further fall to 90.00-90.50 area could be seen. As long as 91.25 support holds, the price action from 93.21 is treated as consolidation of uptrend from 87.37, one more rise towards 95.00 is still possible.

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GBPUSD Analysis.
GBPUSD is in range trading between 1.5829 and 1.6238. Moving sideways without trend in the range is expected to continue later today. The price action in the trading range is more likely consolidation of downtrend from 1.6875 (Nov 16, 2009 high), one more fall towards 1.5708 (Oct 13, 2009 low) is still possible after consolidation.

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AUDUSD Analysis.
AUDUSD’s uptrend from 0.8734 extended to as high as 0.9325. Support remains at the rising trend line on 4-hour chart. As long as the trend line support holds, another rise towards 0.9404 (Nov 16, 2009 high) is possible. However, a clear break below the trend line support will indicate that the rise from 0.8734 has completed.

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USDCHF Analysis.
USDCHF dropped to as low as 1.0132 and reached the bottom of the falling price channel on 4-hour chart. Bounce to 1.0300-1.0400 area would more likely be seen in a couple of days, however, a break above 1.0210 is needed to confirm such case.

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USDCAD Analysis.
No changed in our view, USDCAD remains in downtrend from 1.0576 and the fall extends to as low as 1.0251. Deeper decline is still in favor and next target is at 1.0200 area. Resistance is at 1.0382, as long as this level holds, downtrend from 1.0576 could be expected to continue.

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