USD/JPY Signal Update
Yesterday’s signals were not triggered and expired.
Today’s USD/JPY Signal
Risk 0.75%
Trades may only be entered between 8am London time and 5pm New York time; and then after 8am Tokyo time.
Long Trade 1
Long entry following bullish price action on the H1 time frame immediately following the next touch of 115.00.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trade 2
Long entry following bullish price action on the H1 time frame immediately following the next touch of 114.00.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trade 1
Short entry following very bearish price action on the H1 time frame immediately following the next touch of 117.90.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 25 pips in profit.
Take off 50% of the position as profit when the trade is 25 pips in profit and leave the remainder of the position to run.
USD/JPY Analysis
I wrote yesterday that the key sign would be whether 115.50 held as support over the next 24 hours. It did in fact hold, with the price falling briefly during yesterday’s London session to about 116.30, but it rebounded quite strongly, and is currently not far off a new multi-year high. These are bullish signs and the upward trend looks strong. However, with the Tokyo session ending and the focus shifting to the anticipation of the FOMC statement tonight, it might be that the pair settles down and just moved sideways during today’s London session.
We are unlikely to hit any of the key levels that I am highlighting before the release of the FOMC statement. It is possible we might hit 117.90 which could be a good area for a potential low risk, high reward short trade, but this must be taken with caution. Alternatively, a statement that is bearish for the USD could drive the price down to 115.00 and provide a new long opportunity, as there is no obvious end to JPY weakness in sight. Currently, the upwards trend in this pair is being driven more by JPY weakness than USD strength.
There are no high-impact news releases scheduled today likely to affect the JPY. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time followed later by a release of the FOMC Meeting Minutes at 7pm.