Yesterday's signals produced a profitable short trade from the bearish rejection of the resistance level at 110.20, but it would probably be wise to take profit as ranging conditions still prevail.
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.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.20.
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 ride.
Long Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.07.
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 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 was right yesterday in seeing the resistance level at 110.20 as strong. I have to say again what I said yesterday. This pair is essentially zig-zagging backwards and forwards without really going anywhere. There has still been no change to this situation and it is becoming challenging to trade this pair except for small scalps. There is a suggestion that the large psychological level at 110.00 was used by sellers a few hours ago, so this may become a lower resistance level useful for a possible short trade entry.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Core Durable Goods Orders data at 1:30pm London time, followed by Crude Oil Inventories data at 3:30pm.