Ichimoku Report Feb. 16th

EURUSD – holding on
The pair has had two downside rejections to break the weekly Kumo but yet upside price action has yet to become strong enough to make a case for a real reversal being attempted.  This could either be some profit taking in the short term before new positions build to the downside, or the bulls not really having enough strength to overwhelm the bears.

Either case, the pair remains in the Kumo so the picture will be a bit cloudy until we exit on either side.  The Tenkan suggests momentum is still down but slowed a bit and the Kijun has gone flat in the near term.  If they have their way, price should bounce around the Kumo but the pressure to the downside should still remain.  Watch for a weekly close below the Kumo and 1.3500 to strengthen shorts resolve.  A break above the 10ema will give bulls some short term hope.


GBPUSD – mixed salad but downside favored
Posting a mild gain last week, the pair has yet to produce any meaningful upside price action.  Last weeks gains were smaller than the last 11x the pair had a weekly gain so it suggests this is not due to bulls taking over by any means.  Its lackluster effort will need to be doubled before the bulls can gain some steam.  All the lines are relatively flat so their is no current momentum but the remaining downside inertia which will still have an effect on price.  The Kumo is week for the next month or so until April so it will not provide much of a challenge for either camp.  Its a mixed salad but more of the goodies appear to be towards downside plays.  Need more evidence this week to see where the bulls and bears hearts are.


AUDUSD – Impressive climb and now breaking above the 20ema
Forming an almost outside reversal bar, this is one of the pairs that may challenge USD strength.  Not surprising its a commodity pair and the AUD ta’ boot.

The pair held at the lows from two weeks ago and closed knocking on the 20ema’s door.  Since then it has virtually climbed today and is about to surpass the Tenkan line.  However, all three lines are flat so they are not offering too much of a fight for either camp and are remaining relatively neutral like Switzerland.  Should the pair close above all three lines, it could make a challenge for the 9300/9400 highs from 09′ and 10′.  However a close below the Kijun would challenge the previous lows just below .8600.  Need to see how the DOW does this week to see if the current strength will hold up.


USDCAD – Just not ready for higher levels
Close to making a case for some higher ground, the pair faltered last week and slammed below forming an evening star pattern of sorts but more importantly, last weeks losses took out the last two weeks of gains.  If the pair should continue to sell-off, we feel the next buy level will be just above 1.0200 which has held the last two attempts.  There is not much reason to be bullish in the short term but the bears appear to have some sort of near term control so its the only valid play out there – just not our favorite at current levels.  We’d rather be shorting closer to the 20ema so will wait for price to reach 1.0200 before we consider any real move.


NZDUSD – pulling up the rear
The underperformer for the commodity pairs, the kiwi reversed some of its losses for its first weekly gain in 4 weeks but it has yet to touch or breach the 20ema which is currently the lowest of the three lines which are currently all flat.  The pair appears to be caught up in a downward sloping channel which could be part of a bull flag in the larger scheme of things.  The pair has upside resistance in the three lines and the channel top so selling at the top of the channel seems the current viable option.  Not our favorite scenario so we will play the channel but this week has opened bullish as if it wants to challenge the 20ema.


Chris Capre specializes in using Ichimoku, Momentum, Bollinger Band, Pivot and Price Action models to trade the markets. He has built Ichimoku Systems for Institutions and has an Advanced Ichimoku Course for further training.  For more information about his services or his company, visit https://2ndskiesforex.com

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