Last Thursday’s signals produced a losing short trade following a doji candlestick rejecting the identified resistance level at 111.52.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time until 5pm Tokyo time, during the next 24-hour period only.
Short Trade
· Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.21.
· 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
· Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.85.
· 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 technical situation remains clearly bearish, despite the resistance level at 111.52 being broken and invalidated. The chart below shows that the price has continued to move down within a clear and symmetrical bearish channel. The nearest horizontal resistance level is above the channel, which would mean a break had happened if it is reached, but I would not worry overly about that.
There is good bearish momentum, and as there are no key support levels before 109.85, there is certainly room for the price to fall further.
There is no long-term trend, but the momentum is clearly with the bears, so I maintain my bearish bias.
There is nothing important due today concerning either the JPY or the USD.