Yesterday’s signals were not triggered, as there was no bullish price action at 113.29.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time until 5pm Tokyo time, over the next 24-hour period only.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.28, or 113.57.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 112.06.
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
I wrote yesterday that if the price fails and instead falls to break strongly below 113.29, then a sustained downwards movement becomes more likely. This is the scenario that played out. Last week’s failure at a new 6-month high was, as is typical in Forex, a signal for a reversal, although a strong bullish breakout also looked very possible. This pair is now looking much more bearish, the long-term bullish trend is just about to end, and I see a continuing but slow move down to 112.06 as the most likely scenario over the coming days. This will happen more quickly if the key U.S. due during the second half of this week disappoints the market’s consensus.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of CPI and Retail Sales data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm.