Yesterday’s signals were not triggered, as there was no bearish price action at 112.21.
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 Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.74.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.70.
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
I was correct to identify 111.39 as a support level yesterday. Although it did not look very strong, it held almost to the pip and produced a strong upwards movement. This pair is in a wide long-term range, but it is also technically in a long-term bullish trend. Despite that, it does not look like a healthy trend. There is now a strong bullish movement over the short-term which looks as if it will continue, provided it can break up past the old trend line in the chart below. I have more faith in the momentum than I do in the trend line.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time..