Yesterday’s signals probably produced a losing long trade following the initial small bullish bounce at the support level identified at 109.82.
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 110.33.
· 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 Trades
· Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of the bullish trend line shown in the chart below which is currently sitting at about 109.53.
· 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 Yen has been strong and it initially looked as if this pair would fall further yesterday, but it moved up after rejecting a broken trend line instead. However, this movement erased the anticipated support level at 109.82, which is a bearish sign. After grinding upwards, it looks as if the price is poised for a fall to the 109.50 area at least, but if it breaks up above the 110.15 area, this would suggest that downwards movement is not going to happen. The Yen is still one of the stronger currencies now.
There is nothing due today concerning the JPY, as it is a public holiday in Japan. Regarding the USD, there will be releases of PPI and Unemployment Claims data at 1:30pm London time.