Yesterday’s signals were not triggered, as there was no bullish price action at 110.58.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time until 5pm Tokyo time, over the next 24-hour period only.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.58.
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 Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.61, the bullish trend line sitting just above that shown in the price chart below, or 109.15.
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 if the price did not go on to make new highs above 111.20 during the New York session today, a downwards move was going to become increasingly likely. I had a very cautiously bullish bias. There was no move above 111.20 and the price ended up falling heavily, due to unusual strength in the Japanese Yen at a time when the U.S. Dollar has been quite firm. The sharp downwards movement seems like it might be halted now by a supportive long-term trend line. If that breaks, the support just below that at 109.61 may also be an interesting spot for a bullish reversal. There is short-term bearish momentum, but no wider trend in this pair which can be exploited. Although there is new resistance at 110.00 I would not enter a short trade there today. I have no bias as I think the price is like to settle and consolidate over the coming hours, at least until the FOMC release due later
.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of Crude Oil Inventories at 3:30pm London time, followed by the FOMC Meeting Minutes at 7pm.