Last Monday’s signals produced an excellent and very profitable long trade following the bullish hourly pin candle which rejected the support level at 111.59. It would probably be wise to take profit now.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8am New York time until 5pm Tokyo time, over the next 24-hour period.
Short Trades
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.91 or 113.55.
- Put 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.
Long Trades
- Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.25 or 111.95.
- Put 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.
- Remove 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
I wrote earlier this week that the 112.91 level is looking more and more crucial for this pair, and so it proves to be as this horizontal resistance is now confluent with a very long-term bearish trend line that is the upper channel of all the price action since the multi-year high above 125.00 several months ago. If the price can break up above this level it will be a very bullish sign, and adding to the bullish case would be the fact that the price is now reaching a price above its levels from 3 months and 6 months back.
Alternatively, it is more likely that long-term sellers will step in and fade the 112.91 area. There is evidence this has already been happening in recent hours, with the selling starting to look stronger than the buying.
There is nothing due today regarding the JPY as it is a public holiday in Japan. Concerning the USD, there will be a release of Unemployment Claims data at 1:30pm London time.