Yesterday’s signals were not triggered, as neither of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time to 5pm Tokyo time, over the next 24-hour period only.
Short Trade
· Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 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 Trade
· 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 the picture here had become more complex and less bearish. There was a long-term bearish trend, but the price is very reluctant to make new lows. I saw that if 107.00 broke down, the price could fall to 106.50 or even beyond. The level at 107.00 did break down and the price reached a low of about 106.60. The overall picture is the same: a weak long-term bearish trend, in fact the Yen is the only currency which is making headway against the U.S. Dollar. The price is in a wide bearish near-channel formation. Over the short-term, the price is struggling to rise, so a bearish breakdown looks likely over the short-term, with the price heading towards support close to 106.00 which sees a confluence of a horizontal level, a round number, and a trend line, so it islikely to be strong support.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time, as well as testimony from the Chair of the Federal Reserve before Congress.