Daily Forex Analysis – May 18, 2010

USDCHF Analysis.
USDCHF remains in uptrend from 1.0923 and the pullback from 1.1445 is treated as consolidation of uptrend. Range trading between 1.1250 and 1.1445 is expected in a couple of days. Support is at 1.1250, as long as this level holds, another rise to 1.1500-1.1550 area is still possible after consolidation and a break above 1.1445 could signal resumption of uptrend, only fall below 1.1250 level could indicate that a cycle top has been formed at 1.1445 on 4-hour chart, then deeper decline could be seen to 1.1200 area.

AUDUSD Analysis.
AUDUSD breaks below 0.8715 previous low. Deeper decline is still possible later today and target would be at 0.8600 area. Resistance is now at 0.8830, as long as this level holds, downtrend from 0.9077 could be expected to continue, only rise above 0.8830 level could indicate that a cycle bottom has been formed on 4-hour chart and the fall from 0.9077 has completed.

GBPUSD Analysis.
GBPUSD remains in downtrend from 1.5053 and the bounce from 1.4251 is more likely consolidation of downtrend. Range trading between 1.4251 and 1.4620 is expected later today. Another fall to 1.4000 is still possible after consolidation, a breakdown below 1.4251 could signal resumption of downtrend. On the other side, the pair has reached the lower border of a price channel on daily chart, rebound to 1.4800-1.5000 is possible if 1.4620 resistance gives way.

EURUSD Analysis.
EURUSD remains in downtrend from 1.3093 and the bounce from 1.2233 is treated as consolidation of downtrend. Range trading between 1.2233 and 1.2480 would more likely be seen in a couple of days. As long as 1.2480 resistance holds, another fall to 1.2100 is still possible and a break below 1.2233 could signal resumption of downtrend, only rise above 1.2480 could indicate that the fall from 1.3093 has completed at 1.2233 already.

USDCAD Analysis.
USDCAD’s uptrend from 1.0110 extends to as high as 1.0438 level and the subsequent fall is more likely consolidation of uptrend. Key support is now at 1.0300, as long as this level holds, another rally is still possible and next target would be at 1.0500-1.0550 area. However, a breakdown below 1.0300 could indicate that the rise from 1.0110 has completed at 1.0438 already, then deeper decline could be seen to 1.0200 area.

USDJPY Analysis.
No changed in our view, USDJPY is in consolidation of uptrend from 88.25. Range trading between 91.50 and 93.62 would more likely be seen in a couple of days. Another rise towards 94.98 previous high could be expected after consolidation and a break above 93.62 could signal resumption of uptrend.

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