Yesterday’s signals were not triggered as neither of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8am New York time until 5pm Tokyo time, during 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 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 108.89.
- 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
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 108.89 as a strong support level.
I have reassessed the prevalent trend lines, which have been redrawn in the chart below. There is still a wide bearish channel in force, with a shallow angle and large swings. You cannot call it a strong trend, but due to the high relative volatility and wide area of range, the pair is very tradeable.
There is nothing due today concerning either the JPY or the USD.