USDCHF, USDCAD Ichimoku Strategy Development

USDCHF, USDCAD Ichimoku Strategy Development

Today I’m trying to decide between two forex pairs, USDCAD and USDCHF to see which one is a better investment opportunity in the medium-term.

I look at the markets based on my signature Invest Diva Diamond Analysis (IDDA) and combine it with the Ichimoku Kinko Hyo strategy development technique including indications from the Ichimoku cloud. The IDDA looks at investment strategies from 5 points: technicals, fundamentals, sentiment, capital, and overall.

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On Friday, US consumer sentiment came in higher than expected for November, Chinese President Xi Jinping said that Beijing wants to work for a trade deal with the United States but is not afraid to “fight back.” This week we have more data from the US, Switzerland, the euro-zone, and towards the end of the week, we have Canada’s GDP numbers for the third quarter of the year.

Ichimoku Cloud Analysis:

Looking at the USD/CHF pair, it finally confirmed a break above the daily Ichimoku cloud. If this isn’t big enough, it also opened above the 0.9971 pivot level for the first time since June. However, the future cloud remains bearish and we know that historically the USD/CHF pair normally trades between the narrow range of 0.9971 and 0.9852, and sometimes it expands the range to a higher resistance level of 1.02 and lower support of 0.9725. This is of course unless some major jawboning happens like what we saw back in January 2015. With that, while we could see a temporary pullback towards the upper band of the Ichimoku cloud, the USD/CHF range appears to have widened up a bit.

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Looking at the USD/CAD pair, it has also confirmed above the daily Ichimoku cloud in a solid bullish momentum as the pair moves to form a double bottom bullish reversal pattern. The future cloud is bearish so we could see a temporary pullback towards the upper band of the Ichimoku cloud before further gains towards the resistance level and the neckline of 1.3345, which also falls perfectly on the 61% Fibonacci retracement level.

In my book, Ichimoku Secrets, I explain how this could be an interesting buying opportunity provided you’re willing to take the risk. For more on Ichimoku strategy development, don’t forget to grab the PDF version of my book, Ichimoku Secrets.