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FX TECHNICAL ANALYSIS


level could be the 116.000 level (the Monthly Kumo top). On the other side the Weekly Kijun-Sen at 111.000 – which overlaps the Kumo bottom on the Daily timeframe – provides a strong support.


BTCUSD Retrospect Figure 9: USDJPY Daily


the bullish breakout of the price. Because the breakout wasn’t supported by the other components of the Ichimoku system, the price soon retraced back into the body of the Kumo where it spent the remaining time of the year with bouncing up and down around the Kumo cloud. It tried to break the Kijun-Sen two times – in April and in July – however the volume wasn’t strong enough and the breakout was only successful later, in the middle of September. Finally, the price could move above all the Ichimoku parts but it still couldn’t get far from the top of the Kumo because the lack of volume.


On the Daily chart the movement of the price was very choppy during the year. Because of the weak volume and the mixed picture of the higher timeframes, on the Daily chart the price was breaking out up and down from the thin Kumo cloud seven times – and still, most of these breakouts were false, failed breakouts and the price soon retraced back to the Kumo. Furthermore, in December the


60 FX TRADER MAGAZINE January - March 2018


price only moved in the body of the Kumo which is a very undecided and neutral position.


USDJPY Prospect


Te future of the USDJPY depends on whether it can break out from the channel of the 108.000 – 115.000 levels. Apart from the choppy picture of 2017 all main timeframes support the further up movement: on the Monthly chart – according to the Ichimoku components – the trend is mostly bullish since the end of 2013 and even in 2016 when it was mostly falling, it couldn’t even reach the top of the Kumo. At the end of 2017 it still closed above the Kijun-Sen support level, however it is important to consider that it couldn’t break out of the Kumo yet and the Chikou Span is below the price on the Monthly chart. On the Weekly chart the price is also above the Kijun and currently staying at the top of the Kumo, however on the Daily chart the top of the Kumo remained to be a resistance level for the USDJPY at the end of 2017. If it will break out from the Daily Kumo in the future, the next resistance


As the Ichimoku Kinko Hyo system performs very well on


trending


markets, let’s analyse the Bitcoin/ USD pair too with it as it just had an excellent bullish year. Te Monthly and Weekly BTCUSD timeframes were clearly bullish in 2017: the price was moving above the Kumo and the Tenkan/Kijun lines; and even the Chikou Span was above all Ichimoku components during the year. On the Weekly timeframe, the price only touched the Kijun-Sen four times (in the middle of March, June, July and September) and it hasn’t crossed it at all during the year.


If we switch to the Daily chart, we get a bit more complex picture though: while the price was obviously bullish during the year, there were multiple false


bearish Kumo-breakouts, all


of these were excellent entry points with possible stop loss level a few pips away on the other side of the Kumo. Te first of these false bearish Kumo breakouts happened on the 24th of March. Apart from the price falling below the Kumo, no other Ichimoku components confirmed the direction change,


therefore the price soon


retraced and broke out on the bullish side of the Kumo on the 6th of April


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