The Ichimoku Report Dec. 14th

GBPUSDClosing below the three amigos (tenkan, kijun, and 20ema) caused a lot of additional selling as the pair had one of its biggest selling weeks since september this year.  Now that the pair has broken the three lines, upside rallies offer potential selling opportunities.  Locations to sell would be 1.6445 which is last weeks open.  Just below that is the Kijun which clocks in at 1.6375.  Overall, we like selling at the higher level but it should be noted the pair has sold off for four consecutive weeks and it has yet to do 5 weeks in a row this entire year so we may see some profit taking meaning this week could be a pullback week.  If price action gets aggressive to the downside and clears 1.6100 then we expect a move down to 1.5700 by the end of this year or 1st/2nd week in 2010.

AUDUSDTrotting in place like a show pony, the pair has pretty much opened and closed between 9150 and 9075 for the last 4 weeks.  Nothing to write home to momma about.  It has posted its 1st close below the Tenkan but yet has produced two wicks to the downside over the last two weeks with each one producing higher lows suggesting its attempting another leg up.  Honestly, we feel the market just does not have enough steam in its stride to make such a move and we feel any up moves will likely falter ahead of 9321.  Any aggressive daily closes below 9000 should target the 20ema currently at 8833.

USDCADNot much to report on the Loonie front as the pair is being craddled by the Tenkan but is like the Aussie with closes and opens on a weekly basis relatively where they started and less than 50pips apart making trading frustrating if your looking for some final plays of the year.  If you are more attracted to selling the pair, we suggest waiting for a short rally to the 20ema at 1.0766 and if you are looking to buy, then the price base formed around 1.0400 should offer some good support as rejections down there have been consistent.  Current Kumo structure suggests a rally may be in order for the next two months but downside is likely to continue if we do not see a Kumo break by mid March 2010.

NZDUSDOne of the more interesting pairs to trade, the kiwi has offered a clear buy level at the weekly 20ema which has held two rejections with each one coming within 20pips of the Tenkan offering about 280 pips of play room.  The last two candles holding off the 20ema with the strong bounce and closing higher suggest the pair really wants to break above the Tenkan and get another crack at 7500.  If it should break the white line, we feel 7445 is a likely upside target.  Bears can take a slightly aggressive play by shorting off the Tenkan or on a daily close below the 20ema for a play to the Kijun at 6915.

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 is considered to be at the cutting edge of Ichimoku analysis along with building trading systems and Risk Reduction in trading applications. For more information about his services or his company, visit http://2ndskiesforex.com