Yesterday’s signals produced a profitable long trade following the bullish pin candlestick rejecting the support level identified at 113.29, as well as a possible short trade in recent hours as the price rejects the resistance level at 113.69. It would be wise to exit all or most of the long trade and the short trade completely, as there is a danger of a bullish breakout beyond 113.69.
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 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 weak long-term bullish trend, but the price is now threatening to break above the medium-term bearish channel, with the resistant trend line shown in the chart below, and the key level of resistance at 113.69. I had thought that a sharp downwards movement was looking like an increasingly strong possibility, but a bullish breakout now seems to be the development to watch out for. If the price can make a strong break above here, a further test of the 114.07 and then maybe the 114.50 area is likely to follow. However, if the price fails and instead falls to break strongly below 113.29, then a sustained downwards movement becomes more likely.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of PPI data at 1:30pm London time.