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Technical Analysis
2 min readUpdated Apr 16, 2026

Ichimoku Cloud

Ichimoku Kinko HyoIchimokuKumo cloud

The Ichimoku Cloud is a comprehensive technical indicator that defines support and resistance, identifies trend direction, gauges momentum, and provides trading signals using five calculated lines and a shaded cloud area.

Current Macro RegimeSTAGFLATION→ STABLE

The macro regime is STAGFLATION STABLE — growth decelerating (GDPNow 1.3%, consumer sentiment 56.6, housing deeply contractionary) while inflation is sticky-to-rising (Cleveland Fed CPI Nowcast 5.28%, PCE Nowcast 4.58%, GSCPI elevated). The bear steepening yield curve (30Y +10bp, 10Y +7bp 1M) with r…

Analysis from Apr 18, 2026

What Is the Ichimoku Cloud?

The Ichimoku Cloud (Ichimoku Kinko Hyo, meaning "one-glance equilibrium chart") is a comprehensive technical analysis system developed by Japanese journalist Goichi Hosoda in the late 1960s. Unlike most indicators that measure a single dimension such as momentum or trend, the Ichimoku system provides a complete picture of support, resistance, trend direction, and momentum in one visual framework.

The system consists of five lines and a shaded "cloud" (Kumo) area. The cloud itself is the most distinctive feature, projected 26 periods into the future to show where support and resistance are likely to exist ahead of current price action.

The Five Components

The Tenkan-sen (conversion line) averages the highest high and lowest low over the last 9 periods, acting as a fast signal line. The Kijun-sen (base line) does the same over 26 periods, serving as the primary trend indicator and a key support/resistance level.

Senkou Span A is the average of Tenkan and Kijun, plotted 26 periods forward. Senkou Span B is the 52-period midpoint, also plotted 26 periods forward. The area between these two spans forms the cloud. When Span A is above Span B, the cloud is bullish (often colored green). When Span B is above Span A, the cloud is bearish (often colored red).

The Chikou Span (lagging span) plots the current close 26 periods back, allowing traders to quickly compare current price to price 26 periods ago.

Trading with the Ichimoku Cloud

The most basic signal is the relationship between price and cloud. Price above the cloud indicates a bullish trend; price below indicates bearish. The cloud acts as dynamic support in uptrends and dynamic resistance in downtrends.

Tenkan/Kijun crosses generate signals similar to moving average crossovers. A Tenkan cross above Kijun is bullish; below is bearish. The strength of the cross depends on where it occurs relative to the cloud. A bullish cross above the cloud is the strongest buy signal; a bullish cross below the cloud is the weakest.

The cloud twist (where Senkou Span A and B switch positions) projected 26 periods ahead can warn of upcoming trend changes before they occur in price. This forward-looking feature is unique to the Ichimoku system and is one of its most valuable characteristics.

Frequently Asked Questions

▶How do you read the Ichimoku Cloud?
The Ichimoku Cloud has five components. The Tenkan-sen (conversion line) is the 9-period midpoint. The Kijun-sen (base line) is the 26-period midpoint. The Senkou Span A (leading span A) is the average of Tenkan and Kijun, plotted 26 periods ahead. The Senkou Span B (leading span B) is the 52-period midpoint, plotted 26 periods ahead. The area between Spans A and B forms the cloud (Kumo). Price above the cloud is bullish; price below is bearish. A green cloud (Span A above Span B) suggests bullish sentiment; a red cloud suggests bearish sentiment.
▶What does it mean when price is inside the Ichimoku Cloud?
When price enters the Ichimoku Cloud, it indicates a period of transition or indecision. The market is moving from a trending state to a neutral zone where neither buyers nor sellers have clear control. Trading signals within the cloud are considered unreliable, and many Ichimoku practitioners wait for price to exit the cloud before taking new positions. The thickness of the cloud at the point of entry matters: a thicker cloud provides more resistance to price passing through, while a thin cloud is more easily penetrated.
▶What are the best Ichimoku Cloud settings?
The traditional settings are 9, 26, 52 periods, based on the Japanese trading calendar (which had six trading days per week). Some traders adjust these for modern five-day trading weeks, using settings like 7, 22, 44. For cryptocurrency markets that trade 24/7, settings of 10, 30, 60 are sometimes used. For longer-term trading, doubling the default periods (20, 60, 120) produces slower but more reliable signals. The best settings depend on the market and timeframe. Testing different configurations against historical data for your specific use case is recommended.
Related Terms
MomentumMoving AverageMoving Average Convergence Divergence (MACD)Support and ResistanceTrend Line

Ichimoku Cloud is one of the signals monitored daily in the AI-driven macro analysis on Convex Trading. The platform synthesises data across monetary policy, credit, sentiment, and on-chain metrics to generate actionable trade recommendations. Create a free account to build your own signal layer and see how Ichimoku Cloud is influencing current positions.

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