USD/JPY Signal Update
Yesterday’s signals produced a profitable long trade a few hours ago, with a double inside bar bullish bounce off the support identified at 119.48. The profit will be protected now.
Today’s USD/JPY Signal
Risk 0.75%
Trades may only be taken between 8am London time and 5pm New York time only, or after 8am Tokyo time later.
Short Trade 1
Go short following a bearish price action reversal on the H1 time frame immediately upon the first retest of the bearish trend line currently located at around 120.39.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
USD/JPY Analysis
Yesterday I was confident that the 119.50 would act as support and this proved to be the case. While it has been hard to see this pair really taking off to the upside, there has been a pattern of strong support kicking in every time it begins to fall sharply. As the Bank of Japan seems to be satisfied with the rate for now, there is not a strong impetus to really drive this price up. This means that in the short-term it will probably be hard to make a lot of profit on this pair, but in the longer-term it may well continue to rise, so you could be very happy to be positioned long when that time comes.
There is a medium-term trend line that has had a few touches not very far above at 120.39. If we reach that level it would be a good time to take more profit if you have an open long if the price begins to look as if it will reverse bearishly. Of course this could also be an opportunity for a short trade.
I would not seek another long at 119.48 just yet.
There are no high-impact events scheduled today concerning the JPY. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm London time. Later at 3pm there will be a release of ISM Manufacturing PMI.