Yesterday’s signals were not triggered, as there has been insufficiently bearish price action at both 108.69 and 109.49.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.85 or 110.94.
- 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 bullish price action reversal on the H1 time frame immediately upon the next touch of 108.58.
- 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
Yesterday I forecasted that 108.69 would be broken to the upside, but 109.49 would be a more difficult level to break. This is what has happened over the past day, with the price currently being held by 109.49, but looking increasingly likely to break up past it. For this reason, I am not looking for a short trade from a bearish rejection of this level today, but would instead wait until the higher level of 109.85 is tested.
This pair is in an interesting position, as although it remains in a long-term bearish trend, it keeps being bought strongly when it is at or below the 109.00 area. The Yen is the weakest currency right now, and the pair is back again at the heart of the Forex market, so this is a key pair to watch. There are key long-term trend lines close to 110.50, a sustained break above that level would be a very bullish sign and suggest that the long-term trend has truly changed.
There is nothing due today concerning either the JPY or the USD.