Yesterday’s signals were not triggered, as there was insufficiently bearish price action at either 111.52 or 111.25.
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 111.52 or 112.21.
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 109.85.
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 is now again even more bearish than it was yesterday, with the Yen gaining strongly against the U.S. Dollar and moving down with good momentum. There has been a clear and strengthening bearish pattern taking hold since the second half of last week. I was correct to take a bearish bias yesterday. We have even seen the nearest support levels at 111.52 and 111.25 invalidated, and the recent action suggests the price is preparing to move down to make new lows. There are no key support levels before 109.85, so there is certainly room for the price to fall further.
There is no long-term trend, but the momentum is clearly with the bears, so I maintain my bearish bias.
Trading is likely to be quiet after the London session, as both U.S. and Japanese institutions will mostly be away from their desks today.
There is nothing important due today concerning the JPY or the USD. It is a public holiday in both countries.