Forex Market Technical Analysis

December 30, 2006

EURUSD

EURUSD will form a sideways consolidation in a range between 1.3051 and 1.3364. Near term resistance is at 1.3244, if gives way, there are still chances of test previous high resistance at 1.3364 level. Near term support is at 1.3051, only break below this level will delay the resumption of up trend. For long term analysis, the pair is in consolidation of the up trend and further rise above 1.3668 (the top of 2004) to reach the next cycle top on weekly chart is still possible in the next several weeks. We predict the next cycle top on weekly chart would appear after January 2007.

GBPUSD

GBPUSD bottomed at 1.9433 on daily chart and rise above 1.9846 to reach the next cycle top can be expected next week. Near term resistance is at 1.9747, a break above this level may signal the resumption of the up trend. Near term support is at 1.9433, only break below this level will indicate lengthier correction is underway. For long term analysis, the initial bias will still be on the up side, further rise towards 2.0500 level to reach the next cycle top on weekly chart can be expected, and the next cycle top would appear after January 2007.

AUDUSD

AUDUSD formed a sideways consolidation in a range between 0.7779 and 0.7929. Further rise above 0.7929 to reach the next cycle top on daily chart is still possible next week. Near term support is at the bottom of the price channel, and up side will be contained well by this channel. For long term analysis, the initial bias will still be on the up side, and further rise towards 0.8000 to reach the next cycle top on weekly chart is possible next week, and the next cycle top is nearing.

USDJPY

USDJPY is in up trend, and further rise towards 119.86 (the day high of October 13) is still possible next week, break above this level may signal the long term bullish movement. On the other side, the next cycle top on daily chart is nearing, key support is now at 117.90, and a break below this level may signal the reversal to the up trend.

USDCHF

USDCHF failed to test the down trend line resistance from 1.2768 to 1.2536, and is topping on daily chart. Further pullback to test the key support at 1.2111 is possible next week, and a break below this level may confirm the cycle top. For long term analysis, the pair would move lower towards 1.1287 (the bottom of 2004) to reach the next cycle bottom on weekly chart and the next cycle bottom would be after January 2007.

USDCAD

USDCAD reached to the top of the price channel, slightly consolidation is needed immediately, and pullback towards the up trend line from 1.1285 to 1.1429 can be expected next week. For long term analysis, the pair is moving higher towards 1.1800 to reach the next cycle top on monthly chart.

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