Forex Ichimoku Trade Setups – Oct. 4th
***We are trying a new format for the weekly Ichimoku charts so if you like the new format – make sure to comment below so we can get a good gauge if you prefer this or the latter.
EURUSD – Is this the beginning of a reversal?
For 18 days, the 20ema/Kijun combo has held this pair in its uptrend but the question has to be asked how far can it go without a pullback? It should be noted not 1 (I repeat one) 4hr candle has closed below the Kijun in 18 days. The trend has been that solid so we have to be conscious of that. Anyone looking to get long has an intraday play here with tight stops below.
But, any decent 4hr close below the Kijun suggests possible unwinding to the Kumo. Only a Kumo break warrants a serious reversal but should it happen, expect a fall to 1.33 as the most likely target. One other thing to note for those leaning towards reversal – the pair has yet to sell off for 5 red candles in a row since this trend started.
USDJPY – Will 83 hold again?
As we have written before, we expected the USDJPY to keep selling off after the intervention price action normalized. It did exactly that selling off 9 of the last 10 days. However the most recent price action has a rounding feel to it suggesting the 83 barriers may hold. It should also be considered the BOJ said it would be willing to intervene in the markets should it feel necessary. A 4hr close above the 20ema could do the trick but the pair has a massive kumo in front of it so the pair will likely be sold into any major strength but for now, the line in the sand may just hold.
GBPUSD – Best Candidate for a Kumo Breakout
Out of all the major trending pairs vs. USD, this one seems the most likely to break the Kumo first should it attempt a reversal – perhaps making it the canary in the coal mine. The pair failed to gain any significant new highs in the last 5 days and has been really stuck sub 1.5950 suggesting there mere be some interesting barriers here. But what makes this a more interesting case for a reversal is the flat sections below forming a flat kumo bottom. These are some of the best kumo environments for kumo break trades so traders should be watching this one carefully as the lines are parked nicely at 1.5700 and a major support area for the pair. Any 4hr closes below suggest likely unwinding to 1.5525 so some solid play to the downside is available for bears.
AUDUSD – Showing some rounding signs
After pushing through the major highs at 9400, the pair has cruised along using the Kijun as support in this up-leg coming close to the all-time highs recently at .9750 suggesting a run for the parity was becoming more likely. But, recently the pair has showed some signs of slowing as the price action is becoming more rounded to the topside while tagging the kijun with more consistency. Since its had subtle breaches of the Kijun before, we cannot take the first one as a sign of a reversal. A better clue would be a penetration into the kumo which has not happened in over 24 days. Our favorite scenario to take a reversal would be a 4hr kumo break which would likely send the pair back to 9400-ish. Although the plays off the kijun have created consistent gains – traders should be on the lookout for a possible sell-off in the near future. Only some aggressive buying will add new players to the market as its already heavily long AUD. Pullbacks are preferred but watch the Kumo and price action around it for clues if a pullback is becoming a reversal.
USDCAD – Coming Close to a Major Bottom
Since mid-May of this year, the USDCAD has only had a sub 1.0150 print 3x – all of which produced strong buying reactions with increasing volume each time. One has to wonder if it will hold up a 4x. The R:R on this long opportunity is quite solid so there are some serious gains available if it should hold – likely producing a min. move to 1.0350 offering up 250pips of play to pocket. One note of caution should be noted for the bulls waiting down there. The pair has spent more time below the mid-range line of 1.0400 than above it and the 20ema has been hemming it in for over 2.5 weeks now. Of good news for the bulls, the Tenkan and Kijun have been flat for some time suggesting the momentum and trend is clearly flat so there is ample evidence for a low risk play. As long as the price action looks timid going into the level below, the play should be solid.
This is just some of the techniques and methods we use to trade the markets. If you are interested in learning these methods further, then make sure to check out our Advanced Ichimoku and Price Action Courses for further training where you can also join a community of traders and get permanent access to our forum for continual education. For more information about our services, visit https://2ndskiesforex.com
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