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How to Read the Ichimoku Cloud

Reading the Ichimoku cloud is five facts about highs, lows and closes already made: which side of the cloud the close is on, which of the two spans is on top, how thick the cloud is, whether the tenkan is above the kijun, and whether the chikou is above the price of twenty-six days ago. This paper shows you the euro's seven months above its cloud in 2025 drawn from real closes, the idea as a plane above, inside or below a cloud layer, the five lines on the daily chart, the five readings on one day, and the two cloud colours on your platform.

Difficulty
Intermediate
Reading time
6 min
Pages
8
Reviewed by
Saman Rahbar

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Which side of the cloud

Reading the Ichimoku cloud starts with one question: which side of the cloud is the close on? Above it means the close is higher than both spans of the cloud; below, lower than both; inside, between them. The euro's close first finished above its cloud on 3 March 2025, at 1.04856, and first finished under it on 9 October, at 1.15636. In between it stayed above for seven months, dipping inside for a day or two in late July and August and climbing back out each time.

A plane and a cloud layer

The picture is a plane and a cloud layer. Above the layer is the sun; below it, the rain; inside it, no view at all. The price is the plane, and the layer is the cloud drawn twenty-six days ago from the highs and lows of then. And a thick layer takes longer to fly through than a thin one, which is the second reading: how far apart the two spans are. On 1 July 2025 the euro's cloud was 144 pips thick — a pip being the fourth decimal place, the smallest step most people count in. On 17 September it was 18.

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