Ichimoku Report Mar. 8th
EURUSD – Are the Bulls Getting More Confident?
After 4 weeks trying to close below the weekly Kumo and 4 attempts to close below the 1.3500 big figure, are the bulls finally getting more confident they can hold the downside here? This is an intriguing question as the pair did make a slightly higher high than the previous week. So far, the pair is still caught between two walls; bottom = 1.3450 / high = 1.3800. This is the major range which has to break before new players will really come into the market. Until then, the pair is directionless and is accentuated by the flat Tenkan and Kijun suggesting the pair has no momentum and no trend in place at the moment. The longer the pair remains in the Kumo, the more cloudy the picture remains. The cleanest scenario is to dump out the bottom and start another leg of the downtrend which would be very tidy and consistent with the medium term structure. Wait and see for now and intraday you can play the ranges.
GBPUSD – Going South to Start but a Test Remains Below
The pair has started this week under pressure as it opened and briefly went up only to sell off most of the latter portion of today. Heading into Tokyo on Monday the pair is towards the lows so far so the pressure to the downside is on. However we have this massive wick below which goes all the way to 1.4781 and starts at 1.5145 which is a whopping 360pips (give or take a few). This large rejection could be the first sign of a short term bottom for the pound and you have to consider some players will try and use this bottom as an excuse to buy. It should be noted this is a slightly aggressive play considering the pair has fallen 6 out of the last 7 weeks. The Kumo above is claiming to be quite a ceiling for it being thick and consistent so upside gains will have to be well earned.
AUDUSD – Medium Upside Favored but Strange Pattern in Play
Gaining the last 3 out of 4 weeks, you have to think the pair is attempting to make another run towards the 09′ highs around .9400. Short term support is below at the Tenkan/20ema meeting at .8930 but the upside is a little strange and speculative because we have an expanding triangle which is one of the lesser patterns to trade so short term upside may be limited by the potential trend-line at .9269. Overall, the pattern is weak so very light plays are suggested at best.
USDCAD – At the Do or Die Line
The pair is almost there at the 09/10 bottom around the 1.0200 level and one has to wonder if its going to hold up a third time. In one sense there will be traders totally tempted to make plays here as it has held up before so the risk is low and the upside is decent. However, the pair has fallen 3 out of the last 4 weeks and the downside moves have been strong to solid. The Tenkan and Kijun offer no information other than being flat suggesting the downside may hold as there is no momentum to support a major move at the moment. However the 20ema is still sliding down reflecting the overall drift in the pair so upside plays require caution as they are fighting something that has yet to be tempered.
GBPJPY – Going for a Second Attempt at the Yearly Bottom * Alternate Chart
*We were getting tired of the NZDUSD so thought we’d take a look at another chart.
This pair is behaving somewhat like the GBPUSD as it opened the week and then started straight down for the bottom currently at the lows of this week. The long wick below plays as both a magnet and possible area for aggressive buys to be parked but the overall pressure to the downside has yet to be relieved so you can take a higher risk play at last weeks low which was 132.38 and target the 135.00 figure with stops below. Alternate scenario would be to place sell orders at this weeks high (right where last weeks high was with a stop and reverse play just above that level. There are some interesting scenarios on both sides but so far the overall pressure is still down until it can break last weeks highs.
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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