Ichimoku Report Feb. 1st
EURUSD – Kumo Below, but nothing special
As stated last week;
The problem for the EURUSD is more about a lack of support combined with clear lines of resistance. This along with the Kumo now way below at 1.3770 suggests the first major attempts to support this pair will not come for another 275pips below or more.
The pair fell as expected to 1.3850 just 75pips above the weekly Kumo. Although we feel the pair needs to correct a little bit, we ultimately feel any rallies are just opportunities to sell the pair higher.
For now, the lines of least resistance are still to the downside and with the pair posting its 2nd largest weekly decline in the last 9mos, we feel this selling pressure should continue till the end of Feb.
GBPUSD – About to be…
Who really wants to be buying the pound now? We really cannot find any reason to buy it both technically or fundamentally. From an Ichimoku perspective, the pair is threatening to spill out to the downside of the Kumo and we feel with the likely USD strength to come, the pair will eventually submit. The Tenkan is diving like a shark smelling blood below and the 20ema is also resistance above so the line of least resistance is still to the downside. Should the pair remain below the Kumo till early April, the prospects for a serious dive below 1.5300 becomes more likely as time goes on with the Kumo getting thick and strong to the downside with a flat bottom below at 1.5300.
Until then, the twisted thin Kumo does not offer much for support or resistance so we feel the lines will have the most influence over the pair.
AUDUSD – Only one more to go
Selling off about 250pips last week, closing towards the lows and breaking below the 20ema, the pair now only has one more major downside support-line and price to go before a strong fall can begin. Opening off the Kijun (red line) the pair has found some strength and is checking the 20ema for legitimacy. Should it break this, the Tenkan will come under threat so the pair is in between two opposing forces. Unless the pair gets really strong this week, we feel another challenge of the Kijun will be in order this week or next. Should the pair break this and the .8733 support base (previous bottom), then we feel the pair is headed south for a while, likely towards the Kumo top before finding any support which will likely not come in till .8250-ish.
USDCAD – Doing an About-Face
After having its 2nd largest weekly gain in the last 7mos, the pair closed above the 20ema and Kijun. However, USD selling this week has brought the pair below both lines and we feel dips will likely find support at the Tenkan line. This could where the bulls re-enter to make a second skirmish towards the 20ema and Kijun. Should we have a 2nd weekly close above these lines, we feel technical buyers will come in to launch the pair up towards the Senkou Span A which should not come until after 1.1000. We are liking dips on this pair as buying opportunities.
NZDUSD – Next to the EURO…
This pair looks like its in 2nd to last place against the USD with only the EURUSD looking worse. Why? The pair has sold off for 3 straight weeks but just closed below the Kijun and 20ema for the first time in over 6mos. Now all three lines will act as resistance so the line of least resistance is clearly to the downside. Ultimately, unless the .6969 support base holds (should the pair fall further), we feel the pair is headed for a much lower value, possibly to .6500 before finding any major buyers. There have been some bullish statements by Bollard (Head of RBNZ) which may give the pair a lift but we feel it has more work finding higher ground than lower pasteurs. The only thing which would change our bearish view is a weekly close above the Tenkan.
Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He specializes in using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He has built Ichimoku Systems for Institutions and has an Advanced Ichimoku Course for further training. For more information about his services or his company, visit http://2ndskiesforex.com