Last Thursday's signals produced a wonderfully profitable short trade from the bearish engulfing candlestick reversal from the resistance level I had identified at 113.13. It would be wise to close out the trade as we seem to be beginning a convincing pull-back and it has already given a reward to risk ratio in profit of approximately 8 to 1.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time until 5pm Tokyo time, over the next 24-hour period only.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.17, 111.41, or 111.75.
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.
Take off 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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.79 or 110.55.
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.
Take off 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 last Thursday that the resistance level at 113.13 was looking pivotal, reserving a bullish bias only in the event that the price could get established above that level. Instead, the price failed there again, forming a bearish double top, and then began to plummet as President Trump started to talk down the U.S. Dollar. There are also feelings that the Bank of Japan’s monetary policy is becoming less dovish, and of course fears of a trade war, which have helped to strengthen the Yen. Although the price is still technically in an upwards trend, the situation looks much more bearish, although it seems that the movement has halted for now at the previously inflexive support level at 110.79, so we may get a bullish pull-back over the short
There is nothing important due today concerning either the JPY or the USD.