Chris

Ichimoku Report April 20th

chris — Tue, 20 Apr 2010 17:43:54 +0000

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.

This is just some of the techniques and methods we use to trade the markets. If you are serious about learning how to trade and advancing your learning curve, then check out our courses such as the 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 http://2ndskiesforex.com

Ichimoku Report Apr. 6th

chris — Tue, 06 Apr 2010 16:12:37 +0000

EURUSD – A retest of the 10′ lows likely
As we wrote last week;
From an Ichimoku standpoint, the Tenkan is likely to limit upside gains and is currently posted just above the 61.8% rejection of the last downside swing from 1.3815 to 1.3421 so these levels should hold.

This is exactly what happened last week as the pair had a high of 1.3590 coming within a dozen or so pips from the Tenkan/ Kumo bottom and rejected at the end of the week while following it up this week with nothing but sales. The pair is now pressing against last weeks low and the Tenkan will likely again hold any upside rallies to the mid 1.3550’s for those looking to short on a rally. Now the pair looks set to challenge both the yearly lows at 1.3267 and should it break this level – the 1.3075 area before running into any buying pressure. We are looking for nothing but shorts at this point and feel the pair could be headed for some serious losses in the coming months.

GBPUSD – Back Down to the Yearly Lows?
As suggested last week;

The good thing is if you want ot be a bull, now is a good time as the pair is really close to the 10′ lows and gives traders a really nice risk to reward setup for going long.

The pair rallied last week off the yearly lows to bounce 400pips so hopefully the bulls got to make something off this move as we suggested. The pair has since rejected off the Tenkan just like the EURUSD
has and its possible the pair will make another run down to 1.5000 and the lows around 1.4800 where the bulls will undergo another stress test of their mettle. At this point, we feel bulls and bears will have to wait to take any decent positions since the prices are now off the highs and lows. With the range being so clearly outlined, we suggest only taking intraday plays with a greater favor towards the short side.

AUDUSD – Attempting to Break the Expanding Triangle
After being stuck within an expanding triangle for the last 5months, the Aussie looks like its about to make a legitimate break of the pattern. After bouncing off the Tenkan 3 weeks ago, the pair is pressing heavily against the upper trendline for the pattern. It does have 2 other stops to clear beyond this line at the 10′ highs at .9327 and the 09′ highs at .9403. Beyond that there is the big figure at 9500 and then parity. Considering how well the pair has held up while the dollar has rallied, also combined with the super thick Kumo below and possible upcoming Tenkan / Kijun cross, we feel the pair is likely headed for another run to the upside should it break and close above the upper trendline.

USDCAD – Will it break Parity?
Considering the pair has sold off 7 out of the last 10 weeks and rejected off the 20ema 2x in the last month, we feel the pair is likely headed for further downside. All three lines (tenkan, 20ema and kijun) are all falling at a strong angle so even though there is no new signal, the current downside signal in play remains. Moves back up to 1.0200 should be considered as good rejection plays to short the pair again. Also breaks of parity with closes below on a daily candle will also trigger fresh sales.

EURJPY – Previous Ceiling = Possible Floor?
Just when the pair was set to make another good upside push, the pair got slammed to start the week and is already down about 240pips. The pair literally opened and sold off from the beginning suggesting last weeks break and close above the 20ema may have been a false reality and created a bull trap. The pair was stuck in a range between 120.00 and 125.00 for 2mos and is rapidly approaching the previous range ceiling at the big figure. Should this level collapse – the pair could be set for another run down back to 120.00 but will have to get past the Tenkan first where some longs may be parked. The alternate scenario is the 125.00 floor holds and sends the pair back up but considering how strong and impulsive the fall is, we’d rather wait for a 2nd touch or double bottom a day after the 1st touch before we consider putting any longs up.

Ichimoku Report Mar. 22nd

chris — Tue, 23 Mar 2010 00:27:03 +0000

EURUSD - Moment of Truth?
After 4 weeks of probing the 1.3500 big figure, the pair rebounded two weeks ago with an impressive climb and its first since Jan. 8th of this year. And what did it follow it up with last week? An outside reversal bar to close a hair above the 1.3500 handle. With the force of last week combined with the several probes before, this week will probably be the moment of truth for the pair. If it can do what it failed to do before (close below 1.3500) then the pair is likely to start another round of selling. If it again fails to close below 1.3500 (and possibly for a higher low), then its likely to start another bounce and attack last weeks highs at 1.3793. The good thing is if you are a bull, you are close to where you would want to get in (1.3500). If you are a bear, you can wait for the close below 1.3500 or take a weak corrective move up to the 1.3700-1.3800 area and short for a 1.3500 touch (1st target) and hope for the break you are chomping at the bit for while putting 2nd targets just shy of 1.3000 and stops above 1.3800 (last weeks high).

The Kumo will be like this for another week but the diving Tenkan will likely challenge any upside thrusts.

GBPUSD - Likely the Last Attempt to Get a Good Long
If the pair is going to hold the 1.5000 figure, this is likely the last week (and perhaps your chance is gone now) to get long on a good pullback. The pair has already had two long rejections to the downside and survived last weeks late sell-off (and close towards the lows) to bounce solid this week. The pair could pull an Euro move and bounce off the lows for the next 5 weeks but we feel this is less likely considering the nature of the last two rejections (higher lows). The pair however did start this week making a lower low than the last week so the downside action is a little trickier. The Kumo for the next 4 weeks will likely not interfere with price action as its too far away to have a direct impact on it however it will not encourage bulls by any means.

All the lines (Tenkan/20ema/Kijun) are all too far away to also provide a contact move so the slope/angle will communicate downward momentum communicating to traders getting long has a higher risk than usual. If you want to go long, get as close to the 1.4900 level as you can, put stops below 1.4775 and target 1.5175 and 1.5375. However if the price action gets really impulsive in the next 24hrs (to the downside) we’d suggest serious caution getting long. The longer it takes for the pair to get down to the yearly lows, the better it is for bulls. Bears can take any rejections around the mid 1.53’s and target 1.5000 and 1.4900 which has the better R:R out there.

AUDUSD - Expanding Triangle Confirmed Last Week
Well the expanding triangle theory we’ve been touting was confirmed last week as the upper trendline was touched to the tee and rejected forming a weekly doji candle. Even though it was a doji, the bottom line is the candle closed up and that makes it 5 for the last 7 with the pair opening and climbing for this week so we feel another test of the upper trendline is likely. Should it break and close above, then the pair is likely headed back to the 09′ highs at .9400 and possibly the 9500 figure.

That scenario (break and close above the trendline) or a touch back on the Kijun/20ema lines are the only buy plays out there while bears can watch for tentative price action to drag the pair up towards the trendline. If it approaches with the caution of a cat meeting a dog, then bears can take sells off the trendline (.9251) and shoot for the 20ema.

USDCAD - Close to Breakout/Pullback Level
After closing two weeks ago below the 09/10 lows, the pair followed it up with a decent rejection which has often formed a bounce-back for the pair. The first level to watch is the 1.0200-1.0230 level as a possible rejection area. If this fails, we feel there is about an 81.293646% chance the pair will make its way back to the 20ema where it will undergo a serious stress test and consequently give bears a great location to sell again. Aggressive shorts can be placed just above 1.0200 with targets just below 1.0100 and stops just under 1.0300. Bulls will need a close above 1.0230 or a play off the lows at 1.0063 to take any longs. Anything else would be ill-advised. The close proximity and the drifting down nature of the Tenkan and 20ema will force the bulls to earn their upside. The pair has sold off 20 out of the last 34 weeks but never ore than 3 weeks of selling (in a row) since April of 09′ so chances are good it will produce an uptick this week. However medium-long term prospects are (to quote the old black pyramid with the floating thing inside that gave the recommendations) ‘outlook does not look good’.

EURJPY - Clean 500pip range to play with
This one is not too hard to figure out. The pair is hemmed between the 120 and 125 levels with two rejections to the downside and 4 to the upside. Since touching the lows this year, the pair has spent more time rejecting off these levels while being more apt to close up near the 125.00 level suggesting the pair is open to bouncing quickly off the lows. It should also be noted the pair has formed only 3 down closes (on a weekly basis) while forming 4 up so it has a slightly greater tendency to push up over the last 2 mos than down (within this range) but, and there is a but here, the strongest closes and ranges have been on the selling weeks so the bears are working less hard for their money.

The bottom line is the pair has cleanly rejected off both barriers (120 and 125) so there is a clean range to play with while both sides allow for stops less than 100pips and targets of 500pips (likely to take more than 1 week to get there) hence patience is needed but the R:R is great. An ideal situation would be a slow descent or rise to either level showing tentativeness suggesting the market is not convinced, thus communicating its more likely the range will hold.

This is just some of the techniques and methods we use to trade the markets. If you are serious about learning how to trade and advancing your learning curve, then check out our courses such as the Advanced Ichimoku and Price Action Courses for further training. For more information about our services, visit http://2ndskiesforex.com

Ichimoku Report Mar. 15th

chris — Tue, 16 Mar 2010 08:11:46 +0000

EURUSD - Short term base in place
After now 5 failed attempts to close below the weekly Kumo and 5 rejections with the last one forming a higher low, there appears to be a short term base in on the pair at 1.3500. To note the pair has yet to on a weekly and daily basis close below 1.3500 so there is some traders willing to make a stand here. With that said, we now have a clear line in the sand with buy orders possible at 1.3500 with stops below the lows and targets set to 1.3700. This also means any closes below the lows will likely start a new wave of selling for the pair but for now, short term gains may be had on a re-test of the big figure. Upside will have to contend with the falling Tenkan which should be its first test. The pair is inside the Kumo which is rather larger meaning we are in a directionless market until price emerges on another side. It should also be noted the pair posted its 1st weekly gain in over 10 weeks.

GBPUSD - Double Rejection off the Lows - Next Move is Tricky
This is one of the more interesting charts technically. The pair formed a serious rejection in the previous week which suggested there were some buyers in place supporting it as it was the fiercest rejection to date on the downside. This was followed up with a similar probe which produced a higher low suggesting the hype may be real. However to star this week the pair is pushing lower from the start so what we need is a third test to the downside which either a) make a higher low, or b) make the same low.

In either case, both are acceptable setups for buys to find their way back to 1.5200 and possibly to the fib projections between 1.5425 and 1.5475 so there are some strong upside targets in the waiting. Keep in mind beyond that there is a falling Kumo until the middle of April which should hamper upside gains.

AUDUSD - Trudging along, steady as she goes
Inside an apparent expanding triangle (one of the worst price action patterns out there) the pair is possibly headed for a trendline which is potentially the basis for the price pattern. Notice my three skeptical words in there (apparent, possibly, potentially). I use them because these patterns are not only horrible to trade, but also very dubious and we would need a 3rd touchdown on the upside trendline to verify it. If the line is for real, then around .9250/75 the pair could run into an upside test. It has been climbing 4 of the last 5 weeks which is a solid showing and out of all the majors, its holding up the best against the USD to start this week. Any dips should be contained by the Kijun/20ema levels around .8960 so there is a chance for a small buying opportunity with light positions. The harbinger in this one is its virtually in the middle of the range which is not super exciting. Other than that, the Kijun and Tenkan are flat so the pair is moreso coasting then boasting. Eventually we feel the pair will run into the Kumo which will carry the pair back up for a 2nd attack on the 09′ highs.

USDCAD - New Sheriff in Town
Well, after three attempts and 6mos later, the pair finally broke the 1.0200 barrier and closed below it. We feel this is probably the real deal so we are now only looking at downside plays. The trick is where? We could get aggressive and sell around the mid 1.02’s which is the most aggressive option on the table. Another play is to wait for the 20ema to continue its song as its been holding the pair for some time. Thus, any retracements back to this level are likely good sell opportunities to take profit 1st at the 1.0200 level and then play for a larger move down while protecting stops at this point. The Kumo is massive and should hold any upside moves around the 1.0700 level and with the Kijun and Tenkan flat, the current overall drift is clearly to the downside so we will wait for our retracements and then look for shorts on the pair, perhaps even targeting the parity level by mid-April

EURJPY - Strong Base in at 120.00
Two rejections and two failed attempts to close below the 120 barrier have sent the pair back to the other big figure at 125.00 for a real upside test. What is interesting to note is the pair had a very large selling week at the end of February only to form a higher low back to back weeks and come back to where it started. Even though the downside action did in one week what took two weeks to the upside, the bottom line is this is a real challenge from the bulls. The trouble here is both where the weekly highs line up and the Tenkan which happens to come in at the same level. It is clear the 125 barrier is a hot button which should stir the order flow pot and really test the mettle of who is more serious. The good thing is if you want to sell, the line is clear and if you feel like you want to buy, 120 now offers a good base or you can wait for a break and close above 125 for a move up to the 20ema at 127.50.

This is just some of the techniques and methods we use to trade the markets. If you are serious about learning how to trade and advancing your learning curve, then check out our courses such as the Advanced Ichimoku and Price Action Courses for further training. For more information about our services, visit http://2ndskiesforex.com

Ichimoku Report Mar. 8th

chris — Tue, 09 Mar 2010 02:24:35 +0000

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 is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He 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 and Price Action Courses for further training. For more information about his services or his company, visit http://2ndskiesforex.com

Ichimoku Report March 2nd

chris — Tue, 02 Mar 2010 14:12:31 +0000

EURUSD - Stubborn as a Mule
To date, the pair has yet to close below the Kumo and has now posted 3 weeks of rejection from the 1.3500 level. There are obviously buyers willing to challenge the seriousness of this downmove and are staking claim here at the 1.3500 level. There has been several intraday probes below this level but all have been rejected and not one has had a daily close below. The pair is stuck in an intraday range between 1.3420-ish and 1.3630 so until this breaks, the range dominates. Mildly aggressive plays can be made on the outer edges of this range with tight stops. Overall, with the Kumo flat for the next few weeks, we could easily see the pair stuck in this area till early April as it should act as a magnet for price. However, we feel the longer term prospects are to the downside. Should the pair stay solid and hold 1.3500 until April, then the buyers should have more confidence and push the pair up to the Senkou Span B which climbs for the rest of the summer but will likely have a short leash for bulls making a ceiling just below 1.3800.

GBPUSD - Further Downside Expected
As we wrote last week, ‘Should the pair close below last weeks low then a move towards 1.5000 seems in order.’

As the pair closed below the previous weeks low with a final print on Friday at 1.5246, the pair sold off from the beginning and never looked back as we wrote, tagging the 1.5000 barrier yesterday and dropping way below that hitting a daily low of 1.4782 which is quite a move. We expect nothing but more sales for the pair and short term 1.5000 could act as resistance. The weekly low last week at 1.5151 and the weekly open (this week) at 1.5246 will likely act as upside barriers. We do not expect the pair to have a weekly close above 1.5500 for the rest of the summer with the Kumo being quite thick and flat from April - end of August. With the pair selling off 7 out of the last 8 weeks, why would we buy?

AUDUSD - Quietly building
The aussie is under the radar building up some steam for the bulls as its had now 2 of the last 3 weeks closing up with the two being relatively close to the highs suggesting the pressure is steady. Last week was a small down week but it found strong support at the Kijun which has now joined the Tenkan and 20ema at .8930 so this should act as a short term support for the pair. So far we are at the weekly highs and the larger structure seems to be in play which is an awkward expanding Triangle (of sorts). Overall we only like the dips to the 20ema or supposed Channel/Triangle top for now as possible plays. Other than that, this thing is a mess and we really do not like these structures.

USDCAD - Part of the Commodity Mess
After two weeks of closing down, the pair found an uptick and challenged the Kijun which has been flat for several weeks. However the air was too thin up there and the pair got rejected closing 150pips lower from the Kijun. Since then, the pair has tested the 20ema and failed there now producing lows below the last two weeks. We feel the only plays available are the 1.0200 region which could house some moderate buys there or selling at the Kijun/20ema combo. Overall though the charts are a mess as only the Kijun is falling sharply with the 20ema dropping at a tortuga pace and the Tenkan is flat.

NZDUSD - Flat like the World Once Was
Stuck within a 200-300 pip range for the last 4 weeks, the pair is suffering from a malaise of having no idea where to go. It obviously is respecting the 20ema which it has rejected off of now 2x and if the overall price action for the next few days is flat, there is no reason why we should not expect a third. Ironically the Kijun is climbing while the 20ema and Tenkan are flat. We do not expect the pair to eclipse the Kijun in the near future and the Kumo is not too far below so overall, this is a slow play to either side. Do not expect much.

Ichimoku Report Feb. 22nd

chris — Mon, 22 Feb 2010 22:39:56 +0000

EURUSD – 3 Attempts and 3 failures

Tis now the third time the pair has tried to close below the Kumo bottom and third time it has failed producing a relative doji in last weeks price action. The pair tried to push up then down and went virtually nowhere. The market definitely digested the rate hike from the Fed but it seems like the pair is either consolidating its losses before another run or its really attempting to see if the bulls have the real strength to take the mantle.

For now, its under review with the overall downward structure unchanged but no new added momentum so we cannot get excited about being overly bearish. A rejection upon the 10ema is a decent short term aggressive play but until we get a weekly close below the 1.3500 figure, we are cautiously bearish and waiting for some new talent to arrive.

GBPUSD – Adding to the downside pressure
After holding in place and forming a relative inside bar, the pair sold off again closing just below the major intraday floor at 1.5550 which should act as a short term rejection area. If the last pattern holds, this week could trot in place but if the pair does not make it up above 1.6000 by late March, the falling Senkou Span B on the Kumo should exert downside pressure on the pair forcing lower ground. Should the pair close below last weeks low then a move towards 1.5000 seems in order. For now, momentum is slightly tilted down but nothing extravagant.

AUDUSD – Complex but wide channel with flat Momentum
There is not much about this picture which is pretty or consistent on either side. You have an expanding triangle which is a horrible pattern to trade, you have all three lines flat showing no momentum at all and lower lows which declined faster than the lower highs did so there is little consistency in the overall structure making only the wide levels worth playing. With that being said, there is the highs between 9400-9300 for shorts and the trendline bottom at .8700 for a potential buy. Declines are likely not to be heavy as the Kumo is thick, strong and building over time suggesting the breeze of the kumo should carry the pair up.

USDCAD – Failed above the Kijun, looking for a bottom
After closing above the Kijun for the first time in a long time, the pair failed to gain any new buyers and ultimately slammed back down below it, the 20ema and the Tenkan in less than two weeks. It the pair wanted to be tidy, it would head for 1.0200 where other buyers would likely be excited to scoop up the pair. We feel if you want to be a bull, then wait for 1.0200 or uber-strong signs of a bottom forming before going long. For bears, the 20ema is the only thing offering a play for now currently clocking in at 1.0595 with stops just above the Kijun.

NZDUSD – Showing the weakest strength against the USD
Gaining for two weeks but failing at the 20ema, the pair looks like it will use all three lines above as a test of strength to qualify the bulls desire to take control or concede it again. The pair is in a channel which is relatively stable so we have wide lines and shorter term lines for plays on both sides as the channel top and bottom offer reversal plays while the 20ema, Tenkan and Kijun offer tests for the upside and possible rejection plays. Should the pair remain in the channel till the Kumo, then it will either use it as a base for another run up or likely slam through it and head for the flat bottom.

Ichimoku Report Feb. 16th

chris — Tue, 16 Feb 2010 14:12:49 +0000

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 is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He 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 http://2ndskiesforex.com

Ichimoku Report Feb. 8th

chris — Mon, 08 Feb 2010 23:57:41 +0000

EURUSD - Only the Bottom of the Kumo
As stated last week;

The pair fell as expected to 1.3850 just 75pips above the weekly Kumo. Although we feel the pair needs to correct a little bit, we ultimately feel any rallies are just opportunities to sell the pair higher.

Just as we wrote, the pair rallied to the big figure of 1.4000 and then dropped 350pips closed in the mid 1.36’s. Posting its 4th weekly decline in a row, the pair only has the bottom of the Kumo to take out before a large drop should manifest. Should we have a weekly close below the kumo, we are expecting a dive to the 1.2900 and longer term forecast could send the pair to 1.2400 by year end. Outlook for the bulls on the EURUSD do not look good as the last bastion of Ichimoku support is the bottom of the kumo and beyond that the atmosphere is thin.

GBPUSD - Look out below…
Posting its largest weekly decline since sept. last year, the pair did two things which added to the bearish taste for the pair; 1) closed below the kumo for the first time in 6mos and 2) crashed below the major support at 1.5700 which was the last double bottom support for this pair in the last 10mos. Ichimoku analysis suggests unless a rally happens in the next month or so, this pair could easily be headed for 1.4900 with 2nd targets at 1.4500 and possibly a full reversal of the 09′gains back to 1.3500. Look out below as there is not much to help this pair.

AUDUSD - Cuidado as we are below the Kijun
For the first time since March of last year, we had our 1st weekly close below the Kijun. We expect this along with the 20ema and Tenkan now to act as strong resistance so the line of least resistance has clearly formed to the downside and the bearish prospects have become attractive - especially with the RBA not raising rates last month and further concerns about inflation and a weakening labor market. The kumo does not come in till about 8000 so there is plenty of room for this pair to drop. Any rallies to the Kijun are likely good selling opportunities.

USDCAD - Working hard for its money
One of the few USD pairs having to work hard for its money, this pair had a doji week but nevertheless closed above the kijun and 20ema. This week it used it as support and should it have a weekly close above 1.0800, we feel the pair could likely be headed towards 1.1250 which is where the Senkou Span A comes in (kumo bottom). At that point it will have to work hard for its gains but for now, outlook is good for USDCAD bulls and as long as the dips are corrective in nature, the 20ema should hold as support for a good long base to form.

NZDUSD - Likely first to the weekly Kumo
With its 5th weekly down close and now 2nd below the Kijun, the pair is likely headed for further losses towards 6500 as it spiked up to the Kijun only to get smacked back down 300pips lower. The 20ema has now gotten below the Tenkan and Kijun so this should reject any upside plays. The line of least resistance is clearly to the downside and we would not feel good about buying this pair anytime soon.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He 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 http://2ndskiesforex.com

Ichimoku Report Feb. 1st

chris — Mon, 01 Feb 2010 22:45:09 +0000

EURUSD - Kumo Below, but nothing special

As stated last week;
The problem for the EURUSD is more about a lack of support combined with clear lines of resistance. This along with the Kumo now way below at 1.3770 suggests the first major attempts to support this pair will not come for another 275pips below or more.

For now, the lines of least resistance are still to the downside and with the pair posting its 2nd largest weekly decline in the last 9mos, we feel this selling pressure should continue till the end of Feb.

GBPUSD - About to be…
Who really wants to be buying the pound now? We really cannot find any reason to buy it both technically or fundamentally. From an Ichimoku perspective, the pair is threatening to spill out to the downside of the Kumo and we feel with the likely USD strength to come, the pair will eventually submit. The Tenkan is diving like a shark smelling blood below and the 20ema is also resistance above so the line of least resistance is still to the downside. Should the pair remain below the Kumo till early April, the prospects for a serious dive below 1.5300 becomes more likely as time goes on with the Kumo getting thick and strong to the downside with a flat bottom below at 1.5300.

Until then, the twisted thin Kumo does not offer much for support or resistance so we feel the lines will have the most influence over the pair.

AUDUSD - Only one more to go
Selling off about 250pips last week, closing towards the lows and breaking below the 20ema, the pair now only has one more major downside support-line and price to go before a strong fall can begin. Opening off the Kijun (red line) the pair has found some strength and is checking the 20ema for legitimacy. Should it break this, the Tenkan will come under threat so the pair is in between two opposing forces. Unless the pair gets really strong this week, we feel another challenge of the Kijun will be in order this week or next. Should the pair break this and the .8733 support base (previous bottom), then we feel the pair is headed south for a while, likely towards the Kumo top before finding any support which will likely not come in till .8250-ish.

USDCAD - Doing an About-Face
After having its 2nd largest weekly gain in the last 7mos, the pair closed above the 20ema and Kijun. However, USD selling this week has brought the pair below both lines and we feel dips will likely find support at the Tenkan line. This could where the bulls re-enter to make a second skirmish towards the 20ema and Kijun. Should we have a 2nd weekly close above these lines, we feel technical buyers will come in to launch the pair up towards the Senkou Span A which should not come until after 1.1000. We are liking dips on this pair as buying opportunities.

NZDUSD - Next to the EURO…
This pair looks like its in 2nd to last place against the USD with only the EURUSD looking worse. Why? The pair has sold off for 3 straight weeks but just closed below the Kijun and 20ema for the first time in over 6mos. Now all three lines will act as resistance so the line of least resistance is clearly to the downside. Ultimately, unless the .6969 support base holds (should the pair fall further), we feel the pair is headed for a much lower value, possibly to .6500 before finding any major buyers. There have been some bullish statements by Bollard (Head of RBNZ) which may give the pair a lift but we feel it has more work finding higher ground than lower pasteurs. The only thing which would change our bearish view is a weekly close above the Tenkan.

Chris Capre is the current Fund Manager for White Knight Investments (http://whiteknightfxi.com/). He 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 http://2ndskiesforex.com