Yesterday’s signals were not triggered as there was no bearish price action at the anticipated resistance level of 112.85.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time and 5pm Tokyo time, over 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 113.71.
- 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 bullish price action reversal on the H1 time frame immediately upon the next touch of 112.53 or 112.29.
- 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
I wrote yesterday that I would maintain a bullish bias and a break above 112.85 would be another bullish sign. This was basically correct, but in the past few hours we have seen a pretty sharp double top form at about 113.20 which suggests that the price might find it difficult to move any higher than that area in the short term. However, the picture is complicated by the fact that there is some new support below which looks formidable: the broken, very long-term bearish trend line currently sitting at 112.60 has already acted as good support, in confluence with the psychologically key area at about 112.50. A sustained break below that area would be a very bearish sign. Longer-term bullish traders are probably best off not panicking over the double top and instead waiting to see if the 112.50 area holds as support. Therefore, I still retain a bullish bias.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of Final GDP and Unemployment Claims data at 1:30pm London time.