Daily Forex Analysis – May 20, 2010

USDCAD Analysis.
USDCAD stays above a rising line from 1.0110 to 1.0246 and remains in uptrend. Further rally is still possible later today and target would be at 1.0575 area. Support is at the rising trend line now at 1.0310, as long as this level holds, uptrend could be expected to continue. However, a clear break below the trend line support will indicate that a cycle top has been formed at 1.0536 already, then another fall towards 0.9930 previous low could be seen.

EURUSD Analysis.
EURUSD breaks above the falling trend line on 4-hour chart, suggesting that a minor consolidation of downtrend is underway. Range trading between 1.2144 and 1.2500 would more likely be seen later today. However, another fall is still possible after consolidation and a breakdown below 1.2144 could signal resumption of downtrend.

USDCHF Analysis.
USDCHF’s uptrend extends to as high as 1.1585 level. Further rally is still possible and next target would be at 1.1700-1.1750 area. Support is at the rising trend line on 4-hour chart now at 1.1355, as long as this level holds, uptrend will continue.

AUDUSD Analysis.
AUDUSD drops sharply to as low as 0.8357 level. Deeper decline is still possible later today and next target would be at 0.8200 area. Resistance is now at 0.8500 followed by 0.8570, as long as these levels hold, downtrend could be expected to continue.

GBPUSD Analysis.
GBPUSD breaks above the falling trend line on 4-hour chart, suggesting that a minor consolidation of downtrend is underway. Range trading between 1.4236 and 1.4600 would more likely be seen in a couple of days. As long as 1.4600 level holds, another fall is still possible after consolidation, and a breakdown below 1.4236 could signal resumption of downtrend.

USDJPY Analysis.
No changed in our view, USDJPY is in uptrend from 88.25 and the fall from 93.62 is more likely consolidation of uptrend. Resistance is now at the falling trend line from 93.62 to 92.96, a clear break above the trend line resistance could indicate that a cycle bottom is being formed on 4-hour chart, then another rise towards 94.98 previous high could be seen.

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