Forex Ichimoku Report July 12th

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EURUSD – Getting Stronger, But…
The EURUSD has not climbed for 4 of the last 5 weeks which is an impressive feat for this pair, at least in the year 2010.  The pair has also closed above the weekly Tenkan for the first time since December of 2009 which means the momentum for the downtrend is minimally weak and possibly means the low at 1.1875 is the low for this year as the down-trend is weakening.  We still have fall in a few months so another leg down is not out of the question.  Regardless, the pair is going to target next a daily close above 1.2700, then try and shoot for the 20ema currently parked at 1.2869.

This may very well be a stopping point for the pair to start another rally down as the Kijun and Tenkan are still falling and the Kumo is still declining into next year.  Short-medium term is tilted towards the bulls but the long term picture has not changed.  Buy dips down to 1.2470 for intraday plays or sell bigger rallies around the 20ema for a possible medium term swing down.

GBPUSD – Above and Back Below
After having its 1st weekly close above the 20ema since early Jan. of this year, the pair did what?  Fall back down below the 20ema after closing just on it.  Selling has been mild but enough to put a mild intraday favor to the shorts.  The pair is kind of in a mixed place as its barely below the 20ema but not high enough to sell it.  A move up to the flat Kumo top would be a better place to sell it, or even the flat Kijun a few prints above.  Players wanting to take a mildly aggressive long can wait for a dip to the flat but curling Tenkan just below at 1.4740 targeting back to the 20ema. There are better plays at the current levels so wait for it to make its move either way before taking a side.

USDCHF – Defenses held at 1.0500
After a short few hours probe below the big figure, the pair started a decent bounce and got a little boost moving up to 1.0650 before settling back just above 1.0600.  The pair still looks a little tentative at these levels and will need to look more convincing before longs should be had.  Best to wait for a corrective move back down to 1.0500 before taking another long attempt.  The pair currently has mixed signals across the board with the Tenkan flat, the Kijun slightly up and the price action deep into the Kumo.  A dump below the cloud sets up a possible move back down to the parity level while the pair should have difficulty all the way up to 1.0900 before it gets lighter on its feet.  If the pair should dwell inside the Kumo till early fall, expect a complex end of the year.

NZDUSD – Trying to Jailbreak
After falling halfway into the Kumo, the pair has fought by climbing 4 of the last 5 weeks to jail break out of the Kumo.  It had a brief sojourn above but then slammed back below, only to last week come right up to the edge.

The pair has the 20ema below and will use this as a short term support to pop above the Kumo.  A stronger weekly close above the cloud sets up the pair for several challenges at .7322 (May 2010 high), .7440 (Jan. 2010 high) and then .7634 (Oct. 2009 high).  Beyond that, the pair has a much brighter future towards .8000 with the Kumo as base but longs should be cautious until we clear the 09′ highs.

EURCAD – Cradled by the Tenkan
After performing quite well in the downtrend for over 8mos, the pair decided to get a little frisky and attack the 20ema after 3 straight weeks of climbs.  The pair then soundly rejected off of it and landed right on the Tenkan.  The pair has bounced timidly off of it so far but its starting to flatten out and possibly make a curl up so the momentum for the long term trend has clearly waded a bit.  If the white line holds, then the 20ema should come under attack again.  A weekly close below the Tenkan could produce a solid move back down to the 1.2500 where it will likely run into some bids there.  Another option is to wait for a weekly break above the 20ema which should shift some more models north and search out the Kijun at 1.3745.

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