Ichimoku Report April 19th

Verified Profitable Trader

EURUSD – The Bi-Polar Pair
After selling off for most of the year, the pair has formed its first 3 week gains on a closing basis.  But whats most interesting about it is the pair literally has not gone anywhere forming the ‘dueling swords‘ formation after double bottoming off the yearly low while ponging off the Kumo bottom.  Ultimately we feel the Kumo is too thick and at best the pair will climb to the flat bottom coming up where it will get sold off again.  For now, bulls can enter off the lows just below 1.3300 while bears can sell at the kumo top.

GBPUSD – Trying but Complex Structure Ahead
After bouncing off the yearly lows where we suggest 3 weeks ago to take buy positions, the pair has entered the Kumo but is hanging out on the lower fringe.  It bounced off the Tenkan using it as support to start this week and may test that line again which is falling.  The 20ema is also coming up above so will act as resistance and likely reject the 1st attempt.  The flat Kijun and strange but thick kumo structure suggests any gains will be hard fought and the line of least resistance is to the downside although the Kumo structure suggest more complex price action with a mild downward bias.  For now, we feel the only real play this week is to take the 1st touch selling off the 20ema for a move back down to 1.5300.

AUDUSD – Threatening the Expanding Triangle
After taking on some losses from the Goldie Sachs risk aversion theme to end last week, the pair threatened to break back into the expanding triangle.  However it has since bounced off it perfectly and should it make some gains in the next London/NY session, the pair could be headed back for the 09′ highs at .9412.  With the Tenkan, 20ema and Kijun below, we feel the pair will be well supported on dips and should it break back into the triangle, it may trap some bears thinking a pattern failure only to bounce back up from those lines.  For now, its tough to add new bullish positions unless taking a touchdown on any of those lines or the triangle top for a possible 9400 touch and hopefully an eventual break of 9500 for  a retest of the 08′ highs at 9800.

USDCAD – Back to Back?
Attempting to do something it has not done in a long time, the USDCAD is attempting to make back to back weekly gains.  Although we think the strong gains last week were merely a product of the Goldman Sachs suit causing a short term risk aversion play, the pair could make some more weekly gains.  However with the Tenkan, 20ema and Kijun all tracking down and not far above, we feel any gains will be short lived as they have held and rejected the pair on virtually every attempt except one which resulted in a strong failure that sent the pair selling back in Feb. of this year for 6 of 9 weeks touching off parity.  For now, the parity level holds but with this type of Kumo, we feel its only a matter of time before it gives way.  If it gets back to the lines – look for a sell back down to even-steven.

EURAUD – Possible Play of the Falling Tenkan?
Ever since this pair topped at 2.1000 back in 2008, the pair has been in a virtual free-fall selling off every 2 out of 3 weeks.  Last week it formed a bullish candle as the AUDUSD sold off massively during the risk aversion theme that blazed through the markets last friday.  But what is most interesting to us is how the Tenkan has held virtually every attempt save one to reject the pair back down for more weekly losses.  The one time it got past it, it hit the 20ema and began selling again so we feel the defenses are in place and the AUD is likely to outpace the EURO for some time now.  Should the pair give us another touch on the falling Tenkan, we like shorting this pair for a move back down to 1.4500 which 330pips from the white line.

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