Daily Forex Analysis – May 24, 2010

USDCAD Analysis.
After breaking above 1.0735 previous high, USDCAD pulled back from 1.0749, suggesting that a cycle top is being formed on 4-hour chart. Sideways movement would more likely be seen in a couple of days. Support is at the rising trend line from 1.0110 to 1.0246. As long as the trend line support holds, the price action from 1.0749 is treated as consolidation of uptrend from 1.0110, and one more rise towards 1.0850 resistance is still possible, however, a clear break below the trend line support will indicate that the rise from 1.0110 has completed at 1.0749 already, then another fall towards 0.9930 (Apr 21 low) could be seen.

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EURUSD Analysis.
EURUSD has formed a cycle bottom at 1.2144 level on 4-hour chart and the bounce from 1.2144 extends to as high as 1.2671. The subsequent pullback suggests that a cycle top is being formed. Key support is now at 1.2455, below this level will confirm the cycle top, then deeper decline could be seen to 1.2250 area.

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USDCHF Analysis.
USDCHF stays above a rising trend line on 4-hour chart and remains in uptrend from 1.0923. The price action from 1.1585 is more likely consolidation of uptrend. As long as 1.1424 key support holds, another rise to 1.1800 is still possible. Resistance is at 1.1585, a break above this level could signal resumption of uptrend. However, below 1.1424 will suggest that the rise from 1.0923 has completed at 1.1505 already, then deeper decline could be seen to 1.1300 area.

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AUDUSD Analysis.
AUDUSD formed a cycle bottom at 0.8071 level on 4-hour chart. Range trading between 0.8071 and 0.8450 is expected in a couple of days. As long as 1.8450 resistance holds, the bounce from 0.8071 is treated as consolidation of downtrend from 0.9077, and another fall to 0.7800 is still possible after consolidation.

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GBPUSD Analysis.
GBPUSD stays in a trading range between 1.4230 and 1.4517. As long as 1.4517 resistance holds, the price action in the trading range is treated as consolidation of downtrend from 1.5053, however, above 1.4517 will indicate that a cycle bottom has been formed at 1.4230 and the fall from 1.5053 has completed, then the following uptrend could take price back to 1.4800 area.

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USDJPY Analysis.
USDJPY might be forming a cycle bottom at 88.98 level on 4-hour chart. Bounce to 91.00 would more likely be seen in a couple of days, above this level could trigger another rally towards 94.98 previous high.

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