Yesterday’s signals were not triggered as none of the key levels were ever reached.
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 Trade 1
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.49.
- 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 Trades
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of either of the lower trend lines shown in the chart below, which are currently sitting at about 108.60 or 108.15.
- 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
This pair is in an interesting situation: technically within long and medium-term bearish trends, but very reluctant to stay below the 109.00 level, where it is rumoured that the Bank of Japan have been intervening and pushing the price up. The chart below shows plenty of selling and a wide bearish channel, but also the start of a bullish semi-Quasimodo pattern that could push the price up from its bottom below 109.00. This means that the best opportunities here are likely to be at reversals at or near the chart extremes, rather than simply trying to trade the trend by going short on downwards movements. For this reason, I think the best possible trades over the next few days are likely to set up at either the 110.00 area, or at either of the trend lines at the bottom of the chart.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time, followed by Crude Oil Inventories at 3pm.