FX TECHNICAL ANALYSIS
price was ranging in the cloud till the end of November, when it finally broke out on the downside. The Chikou Span also confirmed the move as it broke out on the downside of the Kumo as well at the same time. All other Ichimoku components were also supporting the move as the Tenkan-Sen was below the Kijun-Sen and the future Kumo was bearish too.
On the Daily EURUSD chart October was the month of correction. After a nice bearish run it moved back to the Kumo level and tried to break out on the upside. However the price closed above the Kumo on the 27th of October, it wasn’t a valid breakout as the Chikou Span hasn’t supported the
move but stayed below the Kumo cloud. At this point the price also got far from the Kijun-Sen line, which indicated disequilibrium on the market. Finally the Kijun-Sen turned flat and attracted the price back, below the Kumo on the 1st of November. Then after a bearish Tenkan-Sen/Kijun-Sen cross the price continued its way down with the support of all other Ichimoku components.
EURUSD Prospect
The Daily and Weekly EURUSD charts are clearly bearish. The Monthly EURUSD is also mostly bearish, as the price is below the Kumo and the Kijun-Sen level and the future Kumo is bearish too,
however the Chikou Span is still above the Kumo and the Tenkan- Sen is above the Kijun-Sen line.
GBPUSD Retrospect
During the last 3 months the price was below the Kumo cloud on the GBPUSD Monthly chart, but it was bouncing up and down between the Tenkan-Sen and Kijun-Sen levels.
On the Weekly GBPUSD chart the price was moving in the body of the Kumo that also supported the ranging period. It bounced up from the Senkou Span B at the beginning of October, reached the Kumo top at the end of October, and bounced down from the Senkou Span A level right after November started. The price finally broke out from the Kumo on the downside at the end of November, but as the price got too far from the Kijun-Sen level at this time, it turned flat to solve the disequilibrium and create harmony on the market and attracted the price back a bit.
Figure 2: EURUSD Weekly Figure 3: EURUSD Daily 78 FX TRADER MAGAZINE January - March 2012
On the Daily GBPUSD chart the price started to march up from the beginning of October and reached the Kumo top till the end of the month. It tried to break out on the upside, but as the Chikou Span didn’t support the move, it bounced back and continued it’s way down. From the beginning of December the price was mainly ranging between the flat Kijun-Sen and the Tenkan Sen lines.
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