Yesterday’s signals were not triggered as there was insufficiently bullish price action at 113.84 to justify a long trade entry.
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 Trade 1
· Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.99.
· 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.
· 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 112.85.
· 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.
· 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 made a strong downwards movement from the area around 114.40 which was both an upper channel trend line and an area of a major previous swing high. This means we may now have seen a major double top having been formed there.
Although this pair has been quite bullish over recent weeks, and is still established within a wide bullish channel, we may be seeing a range develop between roughly 114.40 and 109.00.
Over the short term, it looks as if we are going to see another bullish test of 114.00. There is a great confluence of support at 112.85 presently.
There is nothing due today concerning the JPY. Regarding the USD, the Chair of the Federal Reserve will be testifying before the House Financial Services Committee on monetary policy at 3pm London time, followed half an hour later by Crude Oil Inventories.