Yesterday’s signals were not triggered as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Short Trade 1
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.71.
- 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.
- 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 Trade 1
- Long entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.85.
- 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.
- 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
The price has made another strong downwards movement, printing a new resistance level at 113.71 and breaking below a bullish inner trend line. These are bearish signs; however, the price does remain established within a long-term bullish channel, the lower trend line of which is confluent with a horizontal support level at 112.85. This suggests that the price is likely to find support in this area, although it may take a while to turn around. We have already seen a small bullish bounce here, but I think a test and rejection of 112.85 itself could provide a good long trade entry.
There is nothing due today concerning the JPY. Regarding the USD, there will be releases of PPI and Unemployment Claims data at 1:30pm London time, followed at 3pm by the testimony of the Chair of the Federal Reserve before Congress.