Yesterday’s signals were not triggered, as the bearish price action took place a little way above 112.63.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time and 5pm Tokyo time, over 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 112.74 or 113.28.
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 Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.52 or 111.25.
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
The technical situation did not change yesterday. There has been a clear and strengthening bearish pattern taking hold since the second half of last week. It all began from the earlier rejection of the 6-month high price at 114.50. Longer-term charts show this pair is moving in an expanding range, but ultimately going nowhere.
The medium-term is dominated by bearish trend lines, including the steepest one which is still barely holding the price down. I think it is quite likely to break, and after that I suspect the resistance at 112.74 is not likely to hold either. I see the next higher resistance level at 113.28 as the pivotal level where we are most likely to see the start of a fresh bearish push downwards. There is no long-term trend so if you are going to trade this pair it makes sense to trade in the direction of the medium-term flow, which is bearish. I maintain a bearish bias.
There is nothing important due today concerning the JPY. Regarding the USD, the Chair of the Federal Reserve Janet Yellen will be speaking at a panel discussion at 11pm London time.