Forex Outlook: USD/CNH, USD/JPY, Ichimoku cloud analysis

USD/CNH: Cycle correction completion coming up

(Jing Ren – Orbex)

The USDCNH formation shows the primary zigzag pattern Ⓐ-Ⓑ-Ⓒ, which in the long term seems to be forming a cycle correction IV. This pattern today looks completed in two parts out of three.

The last primary wave Ⓒ takes the form of an intermediate 5-wave impulse (1)-(2)-(3)-(4)-(5).

Perhaps the last intermediate wave (5) is currently under development. It is assumed that it will take the form of a minor impulse 1-2-3-4-5. For its full completion, two parts are needed – sub-waves 4 and 5. Growth in these parts is possible to the level of 6.981.

At that level, sub-wave (5) will be at 76.4% of wave (3).

An alternative option shows that the construction of the entire cycle correction IV has already been completed. It took the form not of a simple zigzag, but of a double zigzag consisting of primary sub-waves Ⓦ-Ⓧ-Ⓨ.

Thus, if this assumption is correct, the market may begin to move in a downward direction, forming the final cycle wave V.

Most likely, wave V will have the form of a primary impulse, as shown in the chart. And it will complete its pattern near 6.365. At that level, sub-wave V will be at 61.8% of impulse III (it is not visible on the chart).

Daily recommendations on major – USD/JPY

(AceTrader Team)

USD/JPY – 136.78

Dollar’s rally on hawkish Fedspeak Thusday and then gain to 137.23 in New York on Friday on broad-based usd’s strength in tandem with U.S. yields suggests correction from July’s 24-year peak at 139.39 has ended earlier at 130.41 (August low) and further headway to 137.60/70 is envisaged, reckon 137.95 would cap upside and yield retreat later.

On the downside, only a daily close below 136.37 may risk stronger retracement to 135.80/90.

Data to be released later

U.S. national activity index and Canada new housing price index on Monday.

Ichimoku cloud analysis: GBP/USD, AUD/USD, USD/CAD

(RoboForex Team)

GBP/USD, “Great Britain Pound vs US Dollar”

GBPUSD is falling within the bearish channel. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen at 1.1865 and then resume moving downwards to reach 1.1585. Another signal in favour of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.2195. In this case, the pair may continue growing towards 1.2295.

AUD/USD, “Australian Dollar vs US Dollar”

AUDUSD is about to break the support area. The instrument is currently moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Kijun-Sen at 0.6930 and then resume moving downwards to reach 0.6735. Another signal in favour of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 0.7055. In this case, the pair may continue growing towards 0.7145.

USD/CAD, “US Dollar vs Canadian Dollar”

USDCAD is rebounding from Tenkan-Sen and Kijun-Sen. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Kijun-Sen at 1.2920 and then resume moving upwards to reach 1.3125. Another signal in favour of a further uptrend will be a rebound from the descending channel’s upside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1.2785. In this case, the pair may continue falling towards 1.2685.