Last Thursday’s signals were not triggered as there was no bullish price action at 110.17.
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 110.94.
- 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 North Korean nuclear test and associated response has produced a gap down in this pair, with the Japanese Yen acting typically as a safe haven currency benefiting from geopolitical “risk-on” sentiment. This doesn’t make much sense as Japan would be a likely target in any Korean war, but that is the way things go. Technically, the price is now finding some support at 109.41, but it is too early to say whether this is likely to hold over the coming ours – probably not, I think. This means that for support, I must look to the next, proven key level at 108.69.
There is a long-term bearish trend in this pair, but it is weak, with several inflections in the area below 109.00 which prevents the price from falling much further than that. There has been speculation that last week’s strong rise from this area was caused by intervention by the Bank of Japan, who can easily weaken the Yen whenever they wish. If this is true, it strengthens the case of 108.69 as a strong support level.
There is nothing due today concerning either the JPY or the USD. It is a public holiday in the U.S.A.