Forex Ichimoku Trade Setups – Oct. 11th

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EURUSD – Reversal Likely
For the first time in this 1 month uptrend, the EURUSD has failed to overcome a previous resistance level.  Every other time during this trend it hit a resistance level and pulled back, when it came back again to that level, it broke through it.  However this time it failed and at a big figure no less (1.4000).  On top of it, its now broken below the Kijun – something its only done once before.  Last time, after 1.5 candles, it broke back above it.  Should it fail to this time, it likely means the reversal is in play and a move back to the Kumo seems the min. it would fall.

Any Kumo break and taking out of the 1.37 figure sets up a likely move to 1.3600 (20ema on daily charts) and 1.35 (38.2% fib of last upleg).  Beyond that, a likely retracement all the way to 1.33 would be in order but there really are no levels to buy until the daily 20ema and the price action looks prime for a reversal.

USDJPY – Kijun Holding
For the last 20 days or so, the Kijun has been holding this pair down and rejecting any major attempts for gains in the pair.  In fact the pair has yet to actually close above it since the 20th of sept.  The pair is forming some price action clues it wants to reverse.  If it does, longs should shave some profit at the Kijun and watch to see how it responds there.  A break of the red line setups up a move to 83.20 so some solid upside available.  A kumo break on the 4hr time frame suggests a further correction to 85 and 85.75 which was the consolidation high after the BOJ intervention.

GBPUSD – Kumo Break Could Do It

For almost 4 weeks now, the GBPUSD has been sailing nicely above the Kumo with no closes inside it.  However, there is a Kumo window coming up which is its weakest point and likely reversal location.  It also is posting a flat bottom at 1.5845 which if price breaks below, could setup a likely reversal back to 1.5700.  Beyond this level, the pair would be prime for a move to 1.55 and 1.5350 but it has failed to make new highs both recently and close above the 1.6000 barrier which has strongly rejected the pair 2x now.  A kumo break could do it for this pair so watch for the setup.

USDCHF – Flat Top Ahead
4 weeks ago was the last time this pair saw the sky above the kumo on the 4hr time frame.  We feel the pair is attempting to make a move above as its now holding more comfortably above the 20ema and Kijun after forming a higher low.  Price action suggests the pair is exhausted from too much selling and from the angle of selling on this last leg, we could have seen the strongest leg which would also hint at being the end of the move.  The flat top comes in just above .9700 so if the pair can manage a break and close above, then look to set longs and target 98.50 and then 1.0050 as the pair is priming for a reversal.

AUDUSD – Strange Kumo Formation
Strongest against the USD for some time, the pair is holding true to form as its holding closer to its recent highs better than any other pair and this makes sense.  However, the pair has a strange kumo formation below and forward which is very emaciated from the rapid dip  and following surge after penetrating the Kumo for the first time in a month.  There is a great R:R trade shorting at the recent highs but since not all the price action clues point to failure, we’d rather wait till the pair breaks below the Kumo flat top and key level at .9725.  Should it do this and close below on the 4hr time frame, we feel a strong reversal is under-way for the pair as we have rarely seen a kumo formation like this lead to a trend continuation move.

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