Yesterday’s signals were not triggered, as there was not sufficiently bearish price action at 111.33 to justify a short trade entry.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time until 5pm Tokyo time, during the next 24-hour period.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.21.
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
Go long following a very strong bullish price action reversal on the H1 time frame immediately upon the next touch of 111.39.
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
Surprisingly, despite the dramatic North Korean ballistic missile test yesterday, this pair has barely moved, and seems to be quietly consolidating around 111.39, with that price a minor “line in the sand” used alternatively as support and resistance following the break of the previous bearish channel. This means that there is little to anchor any trades to here, and even 111.39 looks weak. If the price does not touch the level until the New York open, remaining above it, and them very strongly rejects it and starts to make a strongly bullish move, that might provide a long trade entry. However, it looks as if there will probably be better opportunities in other Forex currency pairs today.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time, and later at 3pm the Chair of the Federal Reserve will be testifying before Congress. There will be a release of Crude Oil Inventories at 3:30pm.