Daily Forex Analysis – October 18, 2010

USDCAD Analysis.
USDCAD breaks above the falling price channel on 4-hour chart, suggesting that lengthier consolidation of downtrend is underway. Further rally towards 1.0232 key resistance is expected in a couple of days. As long as 1.0232 resistance holds, downtrend is expected to resume, and one more fall towards  0.9930 (Apr 21 low) is still possible. However, a break above 1.0232 will indicate that the fall from 1.0672 has completed at 0.9979 already, then the following upward move could bring price to 1.0600 area.

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USDCHF Analysis.
USDCHF may be forming a cycle bottom at 0.9463 level on 4-hour chart. Range trading between 0.9463 and 0.9727 is expected. As long as 0.9727 resistance holds, the price action from 0.9463 is treated as consolidation of downtrend, and another fall towards 0.9300 is still possible. However, a break above 0.9727 key resistance will indicate that the fall from 1.0277 has completed, then the following upward move could bring price to 1.0000 area.

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GBPUSD Analysis.
GBPUSD may be forming a cycle top at 1.6105 level on 4-hour chart. Range trading between 1.5755 and 1.6105 would more likely be seen in a couple of days. Key support is at 1.5755, as long as this level holds, the price action from 1.6105 is treated as consolidation of uptrend from 1.5296, and another rise to 1.6200 is still possible. However, below 1.5755 will indicate that the rise from 1.5296 has completed at 1.6105 already, then deeper decline could be seen to 1.5400 area.

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EURUSD Analysis.
EURUSD remains in uptrend from 1.2587. The fall from 1.4152 is treated as consolidation of uptrend. Key support is at 1.3775, as long as this level holds, uptrend is expected to resume, another another rise to 1.4200-1.4300 area is still possible after consolidation, only break below 1.3775 could indicate that the rise from 1.2587 has completed.

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AUDUSD Analysis.
AUDUSD might be forming a cycle top at 0.9998 level on 4-hour chart. Pullback to the lower border of the price channel is expected later today. However, the fall is more likely consolidation of uptrend from 0.8771, uptrend is expected to resume after touching the lower border of the channel.

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USDJPY Analysis.
USDJPY stays in a falling price channel on 4-hour chart and remains in downtrend from 85.92. Minor consolidation would more likely be seen and bounce to the upper border of the channel is expected.

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