Chart of the Week April 12th

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After breaking out of the expanding triangle which has held the pair confined for the last 5 months, is the pair finally headed to parity? Consider the following facts:

  • The pair has climbed 7 of the last 9 weeks
  • It has not closed below the weekly Kijun since the beginning of February
  • Other than the CAD, this pair has performed the best against the USD in comparison to all the other G-8 countries.

Put all this together and the pair looks like its making another run for parity. What stands in its way?

  1. The 09’ highs at .9412: Should the pair get past this level on a closing basis, we feel its onto the next hurdle.
  2. .9500 Barrier: Could present some psychological resistance but we do not feel confident in this scenario.
  3. The 08’ highs at .9851: If the pair has a weekly close above here, then we feel parity is only a matter of time.

Beyond this, its upwards and onwards. And, we have to add on the Ichimoku Factor.

The Weekly Tenkan / Kijun Cross

The last time this pair had an upwards weekly Tenkan / Kijun cross, it climbed almost 2400 pips. Generally these happen on larger time frames just before clearing a final layer of resistance and it seems set to repeat this pattern. Should it give the cross after clearing the 09’ highs, then we feel a test of the 08’ highs and parity shoots up to about 80%. If it can clear those and break through to parity, its open sky from there.

Chris Capre specializes in using Ichimoku, Pivot Point and Price Action models to trade the markets. He has built and consulted for several institutions in using his Ichimoku Systems and has an Advanced Ichimoku Course for further training.

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