Learn Forex: Ichimoku Indicator Sheds Light on a Big AUDNZD Move

Article Summary: The Ichimoku Indicator allows you to glance at a chart to determine trend validity and where stops should be placed. The power of the indicator comes from the Cloud which strips charts of confusion and filters out low probability trades. By applying the Ichimoku to AUDNZD, we clear away a lot of the smoke and are left with a clear trade idea.

Many traders want to simplify their trading. Despite the lines that appear on the chart with the Ichimoku, there is a simple way to filter out good trend following opportunities from bad with this indicator. The Ichimoku is displaying a probable break lower in the AUDNZD. This article will unpack that statement and show you a simple way to use Ichimoku if youre new.

AUDNZD The Fundamental Backstory

Last week was a big week for the New Zealand Dollar as the Reserve Bank of New Zealand stated in their eighth meeting of the year in no uncertain terms that things were heating up for the Kiwi. The base line figure was that while prime interest rates were kept the same, they are targeting up to 3.0% growth over the next two years which was higher than expectations. This is a rather large divergence as the JPY, EUR, & USD fight to weaken their currencies to stimulate growth.

This announcement sent the NZD higher across the board. Specifically, against the AUD, the kiwi hit a 4-week high. This brings us to the trade highlighted by Ichimoku. Additionally, lets walk through how you can use the Ichimoku to filter out low probability opportunities.

Learn Forex Ichimoku Applied in Full to AUDNZD as price breaks below Kumo or Cloud

(Created using FXCMs Marketscope 2.0 charts)

Ichimoku Trade: Sell AUDNZD @ Market

Stop @ 1.2680

Limit @ 1.2385

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Learn Forex: Ichimoku Indicator Sheds Light on a Big AUDNZD Move