Yesterday’s signals produced a losing short trade following the bearish pin candlestick rejection of the resistance level identified at 109.61.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may be taken between 8am New York time and 5pm Tokyo time, during 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 110.52.
Put 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 109.61.
Put 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 trade is 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 it looked likely that we will see the price continue to advance slowly, but the resistance at 109.61 might halt the advance. A sustained break above that level would be a bullish sign, but I thought it was not likely to happen today. I was wrong, the price did break above that level and this pair is now looking much more bullish, with the room available to advance until 110.52 before reaching obvious resistance. Of course, the big psychological round number at 110.00 might have an impact also. I have a bullish bias on this pair today.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time.