Vantage FX UK (www.vantagefx.co.uk) explain how the Ichimoku Cloud indicator is calculated and how it can be used to offer support or resistance levels.br br Ichimoku Cloudbr br Part 2 of the Ichimoku Cloud series explores the cloud itself and how it is calculated and plotted. The upper line of the cloud is calculated by adding together the 9-day and the 26-day moving average and then dividing the answer by 2. The lower line is calculated by adding together the highest price and the lowest price of the previous 52 days and again, dividing the answer by 2. Both the upper and lower lines are then plotted 26 days ahead, which is the most obvious difference between this indicator and the majority of indicators used in Western trading. We then go on to look at how, in this particular chart, the Ichimoku Cloud can be used to understand how the price may move next. There is though 'a tussle' here between the cloud itself and the moving averages above it, where the cloud can be seen to offer support to the movement and the moving averages seen to offer resistance.