Last Thursday’s signals produced a profitable long trade following the bullish inside candle rejection of the support level identified at 112.29.
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 113.71.
- 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 112.29.
- 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
I was correct in maintaining a bullish bias towards the end of last week, although 112.29 and not 112.50 ended up as the key level. It is interesting that this pair looks to be beginning a new long-term bullish trend, and last month’s open to close prices engulfed the similar ranges of the past several months, which is another bullish sign. The old long-term bearish trend line is still shown in the chart below, but it is broken and invalidated. Everything points to higher prices still, so I maintain a bullish bias.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of ISM Manufacturing data at 3pm London time.