The Good
If you take a look at the RRG gifs, you’ll notice that the Kiwi pairs are positioned fairly well for having a better chance of some upside potential compared to the rest of its peers.
With the Loonie under significant short pressure still, the NZDCAD looks pretty damn good from a bullish perspective. That bull flag on the weekly chart probably has some bulls frothing at the mouth.
Additionally, the Composite Index crossed above its fast average (green) and has a slope that suggests the momentum is strong enough to cross is slow average (yellow), which is often interpreted as a very bullish event.
The Bad
One of the most sought short setups within the Ichimoku Kinko Hyo system is the Ideal Bearish Breakout. And the AUDUSD weekly chart is close to confirming that pattern.
The most common rules for an Ideal Bearish Breakout entry are as follows:
- Price is below the Cloud, the Tenkan-Sen, and the Kijun-Sen.
- The Tenkan-Sen below the Kijun-Sen.
- Future Senkou Span A below Future Senkou Span B.
- Chikou Span below the candlesticks and in ‘open space’
The fourth ‘rule’ is often the final one to occur before the Ideal Bearish Breakout is confirmed – which makes sense because the Chikou Span is considered the ‘trigger’ of most Ichimoku strategies.
If the AUDUSD pair closes around 0.6660 by next week, then the Chikou Span will be in ‘open space’ and below the bodies of the candlesticks.
Bears need to close the weekly below the Cloud, at or below $0.6630, which is the final support level for bulls.
The Ugly
The DXY still looks about as appealing as a mashed potato sculpture of a three-toed sloth made by a toddler.
The first chart image below is from Week 14, with the clear break below the weekly Ichimoku Cloud.
How has the DXY done since then? Not too well. I mean, if you’re short and bear, it looks beautiful.
Noticeable support was found against the 38.2% Fibonacci retracement.
Below that, near-term support doesn’t show up on the weekly chart until the $98.00 value area, where a dominant interior angle (blue diagonal line) and the 61.8% Fibonacci extension exist.
The weekly Tenkan-Sen at $103.12 remains the near-term resistance for DXY.