Last Thursday’s signals produced a profitable long trade following the doji candlestick rejecting the support level identified at 113.29, but it only gave about 25 pips profit so would have ended about even.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time to 5pm Tokyo time, over the next 24-hour period only.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.69, 114.07, or 114.50.
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 113.29.
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
This pair continues to look interesting. There is a long-term bullish trend, but the price has now broken below the medium-term bullish channel, with the broken supportive trend line shown in the chart below. The price was not able to break up above the very long-term resistance at about 114.50, and has continued to erode support levels below 114.00, although the level at 113.29 is still holding. I had thought that a sharp downwards movement was looking like an increasingly strong possibility, and this might still happen, but the price seems to be in no hurry to fall strongly. The key level now looks to be 113.69: if the price can make a strong break above here, a further test of the 114.50 area is likely to follow. However, if the price breaks strongly below 113.29, then a sustained downwards movement becomes more likely.
There is nothing important due today concerning the USD. Regarding the JPY, the Governor of the Bank of Japan will be speaking at 7:45pm London time.