Yesterday’s signals were not triggered, as there was no bearish price action at 113.28.
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.
Protect any open trade by 6:30pm London time.
Short Trade 1
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of the trend line shown in the chart below, which is currently sitting at about 114.40.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 113.40.
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
Developments over the past 24 hours have been very interesting in this pair. There is more trading and volatility, and instead of continuing to fall after the bearish break, the price turned around and broke past the resistance at 113.28, then immediately used the level as new support for a higher push. There is a long-term bullish trend, although the bullish movement does look as though it is at least pausing just below the round number at 114.00. A continuation of the rise looks slightly more probable, but the area above 114.25 has provided strong resistance for a long time, and the trend line currently sitting at 114.40 looks as if it will be enough to contain the price, at least until the U.S. data later, which could send the price anywhere if it is surprising.
One final technical feature to take note of is that the bullish action is contained within a wide bearish price channel which stretches to envelop the entire structure. This will not be invalidated until the price breaks up above 114.40.
I have a bullish bias.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time, followed by ISM Manufacturing PMI data at 3pm, Crude Oil Inventories at 3:30pm, and the FOMC Statement at 7pm.