Ichimoku Technical Analysis Focus:

  • USD may accelerate after nearly three-months of sideways price action with no bullish catalysts
  • GBP, EUR look set to resume march higher with GBP the stronger of the two
  • Commodity FX mixed with apreference for strength on NZD, CAD and a weak AUD

Quiet markets can be frustrating. A benefit of Ichimoku is that the multi-faceted indicator keeps your eyes on the larger picture, which weíll be bringing back into focus today. Among the broader themes continues to be likely US Dollar weakness, resumption of strength with British Pound and EUR, and lastly a mixed back in the Commodity FX scene with likely AUD weakness and CAD strength.

The Ichimoku Charts that matter this week will focuson the following currencies:

  • US Dollar moving into long-term trendline, Ichimoku cloud resistance and set to move lower
  • Resumption of British pound strength set to continue with EUR catching collateral effects
  • Strength ofcommodity FX (NZD, CAD) likely to leave AUD out and down

Want a full (& FREE) guide to walk you through Ichimoku?I created one here (click Advanced Guides)

Traders are often impatientwhena bullish movestall. However, a stallis not the same as the terminus of a move. A key currency in the cross-hairs to this testament is the British Pound and US Dollar. Cable (GBP/USD) has traded sideways while the risk premium in the UK has eroded, which could lift GBP/USD higher.

Ichimoku Analysis Applied to US Dollar- Bearish View in Play

First in focus is the weakening US Dollar that has recently moved into the Ichimoku cloud after trading sideways for nearlythreemonths. In addition to the cloud, Ichimoku has also come into a long-term trendline drawn from lower-highs that seem to favor the broader bearish view of US Dollar until the price trades above the cloud and the trendline.

The US Dollar Could Soon Resume Its Multiple-Month Decline

USD Weakness Pauses, Clouds Expect More

Chart Source:Pro Real Time, IG UK Price Feed. Created by Tyler Yell, CMT

Ichimoku Analysis Applied to British Pound- Bullish View in Play

Traders should look for signs of continuation on the charts, and Ichimoku does a good job making continuation of a trend easy to identify. One of my favorite methodologies of trend continuation is through an indicator called theCommodity Channel Index with a 26-period setting or CCI(26).

I explain in detail how tocomplement the Ichimoku Cloud with CCI(26) in this free article.

Addition to Ichimoku, the sentiment derived from options traders are showing the highest level of sterling optimism sinceFebruary as evidenced by one-month risk-reversals. Risk-reversals help traders to see the ratio of premium being paid in currency pairs to protect against large directional moves that are currentlyout-of-the-money.

Favorable Tailwinds Lift Cable With Ichimoku Supporting Upside View

USD Weakness Pauses, Clouds Expect More

Chart Source:Pro Real Time, IG UK Price Feed. Created by Tyler Yell, CMT

Australian Dollar Departs from Relatively Strong Commodity FX

USD Weakness Pauses, Clouds Expect More

Chart Source: Pro Real Time with IG UK Price Feed. Created by Tyler Yell, CMT

The Australian Dollar has persistently been on the decline against stronger FX like the British Pound as seen on the chart above.

On Tuesday, the Australian Dollar didattract buyers and rally on the back of the Xi speech at the Asian Forum in Boao that inspired confidence in global markets. However, the RBA has held a firm dovish stance that could continue to see AUD sold.

Enhancing Ichimoku with IG Client Sentiment

Ichimoku has value in helping traders see and trade in the direction of a momentum-backed trend. Retail traders, at least when looked through the lens ofIG Client Sentiment, tend to fight strong trends.

We often recommend backing your technical analysis with IG client sentiment as it can do a good job of helping you see sentiment backed moves, which tend to carry on for long periods, which can make for good trades if youíre on the right side.

USD Weakness Pauses, Clouds Expect More

For those needing a refresher, Dailyfx will typically take a contrarian viewto crowd sentiment, and when retailtraders arebuilding anet-shortposition, the signal is often triggered to buy or at leastsuggests prices may rise.

Recently, there has been a jump in GBPJPY and GBPUSD short positions that would favor further GBP appreciation that is in-line with Ichimoku analysis.

New to FX trading? No worries,we created this guide just for you.

---Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical analysis that is powered by fundamental factors on key markets as well as t1rading educational resources. Read more of Tylerís Technical reportsvia his bio page.

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Source https://www.dailyfx.com/forex/technical/article/forex_strategy_corner/2018/04/10/Ichimoku-Report-British-Pound-Finds-Tailwinds-As-US-Dollar-May-Find-Sellers-Technical-Analysis.html?DFXfeeds=forex:technical:article:forex_strategy_corner

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