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Forex Ichimoku Report – Aug. 10th
(We are back from vacation so this is the first post for the week)
EURUSD – 6 Straight
Yep, that’s correct – the EURUSD has posted 6 straight weekly upcloses. Impressive – something it has not done since late 2008! The pair has already taken out the 38.2% fib of the 09′ highs to 10′ lows at 1.3121. Next up seems like a tougher task – the 50% which rests just at the big figure of 1.3509.
The pair has cleared the Tenkan, 20ema and Kijun with ease, only having a brief cameo at the 20ema. In fact, it breezed through them so easily its on the verge of creating an upward (although weak) tenkan/kijun cross. Should this happen, we feel the 50% fib would easily be touched and a likely attack on the Kumo close to 1.3900.
For now, traders have to wait till the 20ema to buy as breakouts have only been pushy 2 of the last 6 or 33% of the time. Thus, a pullback is advised for longs. Shorts best be to wait till the big figure above.
GBPUSD – Upward TKx and the Kumo Top
As of early last week, the GBPUSD posted its first upward TKx (tenkan/kijun cross) since late 2009. The pair had a strong last week and has opened challenging the top of the weekly kumo for the first time since late 09′. If its going to turn around, this would be an interesting place to do it because the top coincides with 1.6000. So far the pair has made 2 attempts to break it but failed and started a strong sell off on the 2nd attempt. If the pair breaks last weeks low, then the selling is more than profit taking. If last weeks low holds and provides a bounce, a 3rd attack on the 1.6000 handle is likely.
For now, 1.55 is the next area to buy on dips – or you can get aggressive and take a play off last weeks low as long as the price action is corrective leading up to it on the 4hr. A break of the Kumo top in the near future makes the situation more complex.
USDJPY – Flirting with 85
The pair last week made its 1st attempt on the 85.00 since Nov. 09′. Since then, the pair has not reacted harshly and this is interesting as the last time it bounced heavily on the weekly touch and the following week was bought up quickly jumping 4 JPY in a heartbeat. However, this time the pair had a light bounce and since is holding close. Does it need a 2nd attempt to really convince people 85 will hold or is it going to break open the gates and test the rumor box of the BOJ intervening?
Buys should be really cautions as long term the pair has really been making a series of lower highs and lower lows suggesting a break would be natural. The tenkan and kijun just crossed down inside the kumo about 5 weeks ago and the trickle lower has continued so serious caution is advised on buying at 85.
USDCHF – Has it had enough?
Posting only 1 weekly upclose in the last 9 weeks, the pair is making a good case for a 2nd up close this week starting out at the gate finding a decent bounce. What is interesting is this has happened in the face of the pair breaking below the weekly kumo – something it has not been under in 5 mos. If the pair can take out last weeks high and close strong, then a move back to the 20ema which rests at 1.0730 is in order. It would also complicate things as the pair will have gone from below the kumo earlier this year, to above it, then back below it. However, some of this should not be a surprise since the SNB sold a massive amount of CHF’s in the earlier part of the year. A close below last weeks low suggest 1.0200 is under attack and then parity.
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