"INDICATOR OF THE DAY" - ICHIMOKU CLOUD
The Ichimoku cloud is a formidable trend indicator, that has proven to work specifically well in Usd/Jpy analysis. The blue shading in the above chart is referred to as the “cloud” which ultimately is used to determine directional bias and the overriding trend. When the market is trading above the cloud, we are in an uptrend, and when we are trading below the cloud, we are in downtrend. The pair has been trading above the cloud since mid-February, with the latest pullbacks off of the 101.45, 2009 highs now testing support at the cloud top for the first time since breaking out back in February. The cloud top which should act as formidable support, comes in by 96.00 and we would recommend keeping a close watch at current levels to see if the top of the cloud supports ahead of renewed upside. Ultimately, a break below the cloud would be required to officially shift the focus back on the downside.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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