Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken only between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of the descending trend line shown in the price chart below, which is currently sitting at about 107.11.
Put the stop loss 1 pip above the local swing high.
Move 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
Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of the ascending trend line shown in the price chart below, which is currently sitting at about 105.66.
Put the stop loss 1 pip below the local swing low.
Move 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
Yesterday I maintained my bearish bias but acknowledged that the lows looked like they had a good chance of holding. This was the correct approach, as after an initial drive down, the price has continued to recover, and at the time of writing is breaking above the key resistance level at 106.37, which will be a bullish sign if it holds. The price is in a long-term bearish trend, but that is not doing much good as a forecasting tool right now. What is more important is the technical adjustment from a wide bearish channel to a narrowing, consolidating triangle. It is this latter formation which is dominating the price now. As we are seeing 106.37 become invalidated, the triangle trend lines become the most important technical feature. It looks as if the triangle will last for more hours, so the best approach today would probably be to trade any convincing rejection of either triangle trend line. I have no directional bias today.
There is nothing due today concerning either the JPY or the USD. It is a public holiday in Japan.