Yesterday’s signals were not triggered, as there was no bullish price action at 113.28.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken 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 113.00, 113.28, or 114.07.
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 112.35 or 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 yesterday in looking to be cautious about any long trade from the former support level at 113.28. This level broke down even before the FOMC release yesterday, and was then used as new resistance as the price drove down. The fall was halted close to the support level at 112.35 but the move also created a new resistance level confluent with the round number at 113.00. These developments suggest that the price will find it difficult to rise much over the short-term, but as the long-range picture shows a weak upwards trend within a very wide range, I think that ranging behaviour between levels is very likely with this pair over the short term. Fading key levels at price action rejections is likely to work well. I have no directional bias on this pair today.
There is nothing important due today concerning the JPY. Regarding the USD, there will be releases of Retail Sales and Unemployment Claims data at 1:30pm London time.