USD/JPY Signal Update
Yesterday’s signals produced a losing short trade following the bearish doji rejecting the identified resistance level at 113.61.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time and 5pm Tokyo time, over the next 24-hour period.
Long Trades
Go long following a bullish price action reversal on the H1 time frame occurring within the zone between 114.39 and 113.61.
Place the stop loss 1 pip below the local swing low.
Adjust 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
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 115.62.
Place the stop loss 1 pip above the local swing high.
Adjust 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.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/JPY Analysis
We have the first signs of a major bullish reversal and a rejoinder of the long-term bullish trend – however these are early signs and need to be treated with caution, although two resistance levels have been cleanly and clearly broken.
The steepest bearish trend line has been broken, but the more obvious, major bearish trend line is still intact. Additionally, the bearish rhythm of the flow of the price has not truly been disrupted yet.
The real test will be whether the price can hold up above the new support at 114.39 over the short term and then 115.00 a little later. A weekly close at the end of this week above 115.00 would be a very bullish sign.
There is nothing due regarding the JPY. Concerning the USD, there will be releases of Building Permits, Philly Fed Manufacturing Index, and Unemployment Claims data at 1:30pm London time followed by Crude Oil Inventories at 4pm.