Daily Forex Analysis – May 6, 2011

USDJPY Analysis.
USDJPY remains in downtrend from 82.76, the bounce from 79.58 is treated as consolidation of downtrend. Resistance is at the downtrend line on 4-hour chart, as long as the trend line resistance holds, downtrend could be expected to continue, and next target would be at 79.00 area. On the other side, a clear break above the trend line resistance will indicate that a cycle bottom has been formed at 79.58 on 4-hour chart, and the downtrend from 82.76 has completed, then further rally could be seen to 81.50 zone.


GBPUSD Analysis.
GBPUSD broke below 1.6431 support, suggesting that the upward movement from 1.5936 has completed at 1.6745 already. Now the fall from 1.6745 is treated as consolidation of longer term uptrend from 1.5344 (Dec 28, 2010 low). Deeper decline would likely be seen in next several days, and target would be at 1.6250 zone.


EURUSD Analysis.
EURUSD broke below 1.4754 key support, and dropped sharply to as low as 1.4510, suggesting that the uptrend from 1.4157 has completed. Deeper decline is still possible later today, and target would be at 1.4400 area. Resistance is at 1.4650, only break above this level could indicate that the fall from 1.4939 is complete.


USDCAD Analysis.
USDCAD broke above the trend line from 0.9973 to 0.9721, suggesting that the downtrend from 0.9973 had completed at 0.9444 already. The pair is now facing 0.9721 resistance, consolidation would likely be seen before breaking above this level, and range trading between 0.9600 and 0.9721 is possible. On the upside, a break above 0.9721 will indicate that the uptrend from 0.9444 has resumed, then next target would be at 0.9800 zone.


USDCHF Analysis.
USDCHF broke above the downtrend line on 4-hour chart, suggesting lengthier consolidation of downtrend from 0.9339 is underway. Range trading between 0.8553 and 0.8750 would likely be seen in a couple of days.


AUDUSD Analysis.
AUDUSD is forming a cycle bottom at 1.0536 on 4-hour chart. Further rise is expected in next several days, and target would be at 1.0850 area. Key support is at 1.0536, only break below this level could trigger another fall to 1.0400 zone.