Last Thursday’s signals produced a nicely profitable trade from the bearish rejection of the resistance level identified at 110.24. The price is still trending down, so it is probably a good idea to let partial profits ride.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time and 5pm Tokyo time, over 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 109.60.
- 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 bullish price action reversal on the H1 time frame immediately upon the next touch of 108.69.
- 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 long-term bearish trend continues, with a wide bearish channel prone to deep bullish retracements/pullbacks. It looks like this pair is going to be the key driver of the Forex market this week, so this is probably where the best trading action will be found. A continued move down to at least the support level of 108.69 looks very likely over the short term. I maintain a bearish bias. If the support breaks there are no key levels close below that, so a sharp fall of maybe as much as 200 pips could follow.
There is nothing due today concerning either the JPY or the USD.