Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 106.80.
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 hours.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.48, or 108.05.
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.
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 Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.03.
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.
Take off 50% of the position as profit when the price reaches 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
I wrote yesterday that the most likely scenario was a resumption of the downwards trend, probably at the next resistance level of 106.80. I was wrong, the bullish turn has persisted and is increasing in strength, beginning an exponential micro-trend. We have also seen another, higher former bearish trend line broken to the upside, so the price is moving more strongly counter to the long-term bearish trend. The next resistance level, at 107.48, is very confluent with a key psychological level at 107.50, so this level may be more difficult for bulls to break, suggesting a higher probability of a resumption of the bearish trend might start there.
There is nothing due today concerning either the JPY or the USD.