CADJPY - Comprehensive Ichimoku AnalysisCADJPY is bullish across multiple timeframes. A comprehensive top-down Ichimoku analysis can help us confirm our bias and find the best time to enter.
Weekly:
On the weekly chart, it is bullish. We have strong Ichimoku signals such as Tenkan-sen above Kijun-sen, a bullish Kumo cloud, Chikou span above price, and lower highs forming in price action.
If we use a Kyushu legs analysis, we can see that the market is continuously bullish. Kyushu legs analyses momentum over the past 9 weeks and can also help us analyse time cycles and trend length.
Using Kyushu legs, we can see that the last major bullish trend lasted 33 weeks. This gives us two targets. Given that the current bull period has lasted 23 weeks, we could expect it to either continue for 3 more weeks (making a total of 26 weeks, a significant Ichimoku number), or for the full 33 weeks, which would take us all the way to September. Either way, these both show that there is potential momentum remaining in this bull run.
Daily:
From the daily point of view, it is also bullish. We have price above Tenkan and Kijun sen, Chikou above price, and a bullish Ichimoku cloud. One thing that gives me caution is that the Kumo cloud is both flat and thin. This means it is weak and may not be a strong support in the case of a retracement.
If we leave my weekly targets in view, we can look at the daily and plan some scenarios:
The main scenario is a continuous move bullish, with minor retracements until 5 September. However, we do have major resistance points ahead as outlined below.
4H and below:
On the 4H chart we can easily see the potential resistance points at 105.843 and 107.211. These are pivot highs, and I would not buy going into these. It is very risky, but a successful breakout of these levels would be powerful. Other signals on the 4H chart are positive. Bullish Kumo, recent bullish TK crossover, and Chikou just coming above candles right now.
The 1H chart is also clearly bullish. However, the Tenkan-sen, Kijun-sen and Kumo lines are all flat. This is significant. It means that the market is not making new highs. We can even see this based on the wick from the previous candle. I would only buy into a market is Tenkan-sen, Kijun-sen, and Kumo are angled up. Whenever you see flat lines, it means that a retracement back to Kijun-sen or the Kumo cloud is more likely.
How to enter:
The long-term view is bullish, so I am currently looking for a chance to enter on the 5m chart. I am currently waiting for a resistance breakout, at the same time as bullish stochastic, price above bollinger bands, and relative strength on the pair versus all other CAD pairs. All of these confluences can give me the confidence of taking a bullish long trade with a very large lot size and small stoploss.
You can use any entry criteria you like, as long as Ichimoku remains bullish on either the 1D and 4H chart, or 4H and 1H chart. If Ichimoku is bullish, then it increases the probability of a breakout, and in turn, increases the success of your trades.
Conclusion:
- Bullish on the weekly chart, with at least 3-7 weeks of potential bullish momentum
- Bullish on the daily, with upcoming resistance points at 105.843 and 107.211
- Bullish on intraday timeframes, with a recent TK cross on the 4H chart
- Waiting for a clear edge on the 5m chart to make an entry. I will wait until relative strength is observed, combined with resistance break, bullish stochastics, and bullish bollinger bands.
I cannot emphasize enough that you need to wait for a clear edge to appear on lower timeframes. This type of trading is essentially breakout trading, and the majority of breakouts fail. Ichimoku helps us see when breakouts are more likely to occur, but Ichimoku by itself won't give you the exact trading signal to buy or sell. The entry might happen in a few minutes, later today, or not at all. We could see a bounce off resistance or a clear breakout. The beauty of Ichimoku is that it can help you plan your scenarios and easily see opportunities like this. Despite the long writeup, I was able to see everything above in less than 5 minutes of scanning.
Keep an eye on multiple timeframes, use Ichimoku to gauge the trend strength, and use lower timeframes to find the edge to enter.
Good luck!
