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Forex Ichimoku Report – Sept. 6th
EURUSD – Off the 50 2x
After posting a decent rejection the week before and pushing slightly higher, the euro had a much stronger last week and gained a bit of ground. The pair actually rejected twice off the 50% fib from the 1.1875 – 1.3330 move at 1.2606 and used this as a spring board to make some more gains. From a short term perspective, this is good news for bulls.
What gets tricky is where its at now. The pair currently sits under the 20ema, the Tenkan and has the Kijun a mere 40pips below. All three lines are horizontal for the most part which is diligently communicating there is no trend as of yet. The first two will also likely act as some sort of resistance for this week. This suggests traders should wait till either line gets cleared before taking a stand. Two things should also be noted;
1) the 50% fib projection is at 1.4059 so this could be a great long term upward target
2) but for this to happen, the pair will have to go on a run soon because after november, the Kumo gets real thick and should make gains difficult or an upward run much more challenging so now is the time
GBPUSD – Doing a little better
Unlike its little euro brother, the sterling is performing a bit better. This is because its already had a good penetration into the Kumo and is sitting comfortably above the 20ema which it has not been below since July of this year. What also bodes well if it does decide to make another run up is the Kumo up ahead. Its currently twisted and relatively thin so it should not offer much of a fight. It also means it will not offer support (should it break above) so we could see some choppy strange ranges till November this year.
The tenkan is currently hemming the upside while the 20ema holds the low. A break below suggests a likely move to the Kijun either this week or next so could see some losses soon if no major upside is had.
USDJPY – After a Long Rejection?
After a long rejection candle last week, the USDJPY has continued to find lower ground. It did not create new lows last week, but still lost ground and closed lower on the week. It has also rejected off the same low last week at 83.58 so this should become the next line in the sand lower. A close below opens up more losses but some bears may want to try a play here with tight stops. Bears can wait for the close below or a move back up to the Tenkan which is currently parked at 86.33 and also a three week consolidation high from the 1st three weeks in August.
USDCHF – 2 in 13
Since posting some strong gains and a high of 1.1725 in early June this year, the USDCHF has slid 1600 pips or 11 out of 13 weeks in a row. It has only gained 2 out of 13 weeks which really communicates the consistency of selling from the institutional market. Anyone looking for a low or a buy really is out of their minds as the trend is clear, strong and totally consistent. Price has closed 4 out of the last 5 weeks below the Kumo and with the diving Tenkan and 20ema, the pressure and momentum should continue. The next major test is parity and beyond that – 9900 so look for pullbacks to get short and make sure to cover or take some profit at parity and 9900.
USDCAD – Hemmed in
Although the Kumo makes it hard to see, the USDCAD has been hemmed in by both the Kumo and the 1.0679 level since mid May this year. It has rejected off this level 7x on a weekly basis and now sits below both the Kumo and the 20ema. In fact, the pair has yet to close inside the Kumo on a weekly basis since August of last year so any closes inside should be taken seriously. At the same time, the range has also held 2x on the downside at 1.0111 so players could take a bounce off this level with relatively low risk. Play the wide range for now until its get cleared and if another strong rejection comes off the lows, traders can expect the pair to return minimally to the 20ema.
EURGBP – Approaching a critical level
After forming a higher low above the previous low sub 8100, the pair has climbed for 3 weeks straight and is now approaching the 20ema. This is critical because it has not closed above it since April of this year and has rejected off of it 3x before so this level has to be watched. The Tenkan is supporting it this week but is flat trying to decide if this thing has momentum or not but should we see a weekly close above the 20ema, then the Kijun will likely come under attack in the following weeks which sits nicely at 8600 so a good 200 pips of room to play with there.
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