Last Thursday’s signals were not triggered, as there was no bullish price action at 110.95.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time until 5pm Tokyo time, during the next 24 hours.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.40.
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 110.50 or 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 price reaches 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
Although the long-term conditions here must be described as technically bearish with a strong ranging tendency, over the short-term the action is starting to look more bullish. I suspected this might happen as we get very close to the 110.00 price level which is a very important psychological number, with a tendency to act as a floor under the price. There is new support at 110.50 which looks like the first major higher low of what might become a more sustained upwards movement. However, there is still plenty of resistance below the 111.50 area, so it is likely that the price will struggle to clear this. If it does clear this area easily, it would be a very bullish sign. It is still more likely that there will be another downwards leg from a reversal somewhere between 111.13 and 111.50, and I must maintain a bearish bias, although the greater reward to risk is more likely to come on the long side.
There market will focus on the Yen later as the Bank of Japan give their monthly input, which could push the price anywhere.
There is nothing important due today concerning the USD. Regarding the JPY, the Bank of Japan will be releasing its Monetary Policy Statement and Outlook Report, followed by the usual press conference later.