Yesterday’s signals produced a profitable long trade following the bullish doji candle on the hourly chart rejecting the support level previously identified at 110.76.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time until 5pm Tokyo time, during the next 24-hour period only.
Short Trade 1
* Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.49.
* 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 ride.
Long Trade 1
* Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.76.
* 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 ride.
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
The price has behaved quite predictably, technically, over the past day, initially finding support at 110.76 and then almost reaching the resistance level at 111.49, from where it has been falling again over the past few hours.
We have a long-term bearish trend, so if the price can break below 110.76 that would be encouraging for bears, but shorts before that with the current low volatility are relatively dangerous without a stop well past 111.49, which would be likely to give a poor reward to risk ratio. The alternative is to wait for another retest of 11.49 and try to find a short trade entry there.
There is nothing due today regarding the JPY. Concerning the USD, there will be a release of Final GDP and Unemployment Claims data at 12:30pm London time.