Weekly Ichimoku Analysis Nov. 9th+

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As we wrote last week, anyone looking to get long could use the weekly Tenkan line which held, rejected the attempt at lower prices, and have since pushed the pair back up within 70 or so pips of the yearly highs.  Although some warning should be had in the fact two weekly candles still have not erased all the damage from the sell-off two weeks ago, the bottom line is only a break and close above the yearly high is needed to confirm the rebound and demonstrate the overall strength of the bulls control of the market.

The kumo structure is quite favorable to further gains as long as 1.4100/4200 holds and the base is building for rising support levels in early 2010 so unless a Young and the Restless type drama unfolds soon, we expect the pair to march on with no weekly breaches below the 20ema or the Kijun line which is now parked above the Kumo.  Bulls are still in control and until price closes below the Tenkan, buying is recommended 3 out of every 4 times.


This pair is finally threatening to do something new – that is close above the weekly Kumo.  Its pushing the upper edges of the cloud and a break would open up the skies for this pair to make a nice year end push.  The harbinger in this scheme is the flat Kumo top or Senkou Span B which is flat till 2010 so that would likely keep price around it for some time and act as a magnet.  An alternate scenario is the flat top could act as a springboard for a much higher price but the kumo has yet to really do anything interesting in the upcoming weeks and is rather anemic for the 1st Q of 2010 so we expect any major gains to be lost until the direction gets more clear after the first few months out of the gate in the new year.  Overall, we are not as excited for this pair and feel the emperor has to find some new clothes before we cast our votes behind the bulls on this one.  To its credit, the pair has climbed 2 straight weeks since bouncing off the 20ema so the support lines could be building from there.


Opening the week and only making gains, the pair has taken out the losses from two weeks ago and looks set to take out the yearly high.  Like the EURUSD, this pair also held well at the Tenkan line and did not even breach it suggesting it has more strength which is nothing surprising but important to note.  The base is building for this pair so unless we get a close below the tenkan, any dips towards that should provide great buying opportunities with low risk and plenty of upside.  This pair is still chugging along like a champ and we see no reason yet to be sellers for unless we lose our sanity and intelligence.  2010 should be nothing but gains from 7800 up to a likely parity touchdown.  The only three hurdles left for this pair are 9326 (yearly high 09), 9400 (swing high March 08) and .9845 (high for 08).  Beyond that, the big parity should be tagged with only a modicum of effort from the bulls.  This month should be more interesting as the RBA is expected to raise rates again for the 3rd time this year.  Gains leading up to that will likely just highlight traders overall confidence in this pair.


This is a case of the ‘close but no Havanna cigar’ (which I highly recommend btw) as the pair attempted to break the 20ema only to be rejected just shy and take it back on the chin selling off roughly 300pips since the high from last week.  The pair opened the week and has dropped 200pips so we do not see any bulls coming in soon, especially since we have just breached the Tenkan so selling should remain strong for the rest of the week.  Breaks below 1.0430 should add more kerosine to the fire and we feel this would likely result in an aggressive move to 1.0381.  A close below here targets the yearly low at 1.0200.


Although this pair has the most make-up homework being the one to close below the weekly Tenkan and drop the most two weeks ago against the USD, to its current credit the pair has opened the week and produced all gains with the high in place now being the virtual high for the entire week so the engines are moving along for the bulls.  They will likely be cautious going into the 2nd attempt at the yearly highs (just north of 7600) but there is plenty of space and profits for them between here and there being 200pips of play so we feel dips will be modest until we press on the borders of 7600 for another inspection.  As long as the pair closes above 6600 for the year, we suspect buyers will continue to come into the market gunning for 8000 and likely 8229 (08 high).  The Tenkan has shown less reliability than the other pairs so we would be apprehensive about buying here but if the 20ema can make it up to the swing lows of last week, then we would be much more interested in buying then.


Written from the shores of Punte Del Este, Uruguay

Chris Capre is the current Fund Manager for White Knight Investments. He specializes in the technical aspects of trading particularly using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He is considered to be at the cutting edge of Technical Analysis and is well regarded for his Ichimoku Analysis, along with building trading systems and Risk Reduction in trading applications.

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