Yesterday’s signals were not triggered as none of the key levels were ever reached.
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.
Protect any open trade by 6:30pm London time.
Short Trade 1
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 114.08.
- 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 Trades
- Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.85 or 111.74.
- 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
This pair has arrived at a very interesting situation. It is established within a symmetrical bullish channel, and is clearly in a bullish trend over at least the medium-term. Aligned with the bullish pattern, the price has established additional support at the higher level of 112.85. However, there is a very long-term bearish trend line which is the price is unable to convincingly break, currently sitting at about 113.30. Above that price, there is the upper channel trend line, which is likely to be less important, and then finally the horizontal resistance at 114.08.
I think that if the FOMC release due later is better than expected for the U.S. Dollar, the outcome will be most strongly expressed in this pair, with a strong bullish break above that long-term trend line, possibly rising all the way to 114.00. Alternatively, a disappointment for Dollar pulls could see a long-term high printed here at or close to this significant bearish trend line, followed by a sharp drop. This currency pair will probably be the best vehicle to use to trade the FOMC release.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of FOMC Meeting Minutes at 7pm London time.