Yesterday’s signals produced a long trade from the bullish bounce at the ascending trend line, although the trade was only good for a maximum of approximately 25 pips.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.90 or 106.10.
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 Trades
Go long following a very bullish 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 105.59.
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
I wrote yesterday that the consolidating triangle was most likely to give opportunities from rejections of the trend lines. However, with the FOMC release later, there was a chance that the triangle may be broken on either side, at least temporarily, due to the volatile price movements that are likely in this pair upon such an event. Interestingly, the FOMC release did not break the consolidating triangle, suggesting that despite the long-term bearish trend, bears are having difficulty in really pushing the price down. The technical picture is interesting and will probably now be dominated by the question of whether the lower trend line holds. This could be a major pivotal point, and it would be a very bearish sign if the price breaks down because there is little to stop it falling much further, except psychological buying as we get close to the important level of 105.00. I have no directional bias today, but a bearish breakdown seems increasingly likely as the price action near the trend line gets “heavier”.
There is nothing due today concerning either the JPY or the USD.