Daily Forex Analysis – October 4, 2010

GBPUSD Analysis.
After touching the lower border of the rising price channel on 4-hour chart, GBPUSD rebounded from 1.5669. Range trading between 1.5669 and 1.5921 is expected in a couple of days. As long as 1.5669 support holds, the price action in the trading range is treated as consolidation of uptrend from 1.5296, and another rise towards 1.5997 (Aug 6 high) is possible. However, a breakdown below 1.5669 will indicate that the rise from 1.5296 has completed at 1.5921 already, then the following downward move could bring price back to 1.5200 area.

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USDCHF Analysis.
USDCHF moves sideways in a trading range between 0.9708 and 0.9877. The price action in the trading range is more likely consolidation of downtrend. Resistance is at 0.9877, as long as this level holds, downtrend is expected to resume and another fall towards 0.9634 (2008 low) is still possible. However, a break above 0.9877 will indicate that lengthier consolidation of downtrend is underway, then further rally towards the falling trend line from 1.0624 to 1.0277 could be seen.

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USDCAD Analysis.
After a sideways consolidation, USDCAD broke below 1.0191 previous low, suggesting that the downtrend from 1.0672 has resumed, deeper decline could be seen later today and next target would be at 1.0100 area.

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AUDUSD Analysis.
Being supported by the uptrend line from 0.8860 to 0.9462, AUDUSD rebounded from 0.9624, suggesting that the uptrend from 0.8771 has resumed. Further rise towards 0.9849 (2008 high) is expected later today. Support remains at the trend line on 4-hour chart, as long as the trend line support holds, uptrend will continue.

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EURUSD Analysis.
EURUSD stays above a rising trend line on 4-hour chart and remains in uptrend from 1.2643, and the rise extended to as high as 1.3792 level. As long as the trend line support (now at 1.3583) holds, uptrend is expected to continue and next target would be at 1.4000 area. However, a clear break below the trend line support could indicate that a cycle top is being formed, then deeper decline could be seen to 1.3400 area.

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USDJPY Analysis.
USDJPY’s fall from 85.92 extended to as low as 83.16. Deeper decline towards 82.87 previous low is still possible later today, a breakdown below this level will indicate that the downtrend from 94.98 (May 5 high) has resumed, then further decline towards 79.75 (1995 low) could be seen. Resistance is at 84.00, only rise above this level could indicate that a cycle bottom has been formed on 4-hour chart, then further rise towards 85.92 key resistance could be seen.

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