Yesterday's signals produced a losing short trade during the Asian session, with an outside bearish candle rejecting the resistance level identified at 110.62. However, this did not produce the minimum profit required of 20 pips to become profitable before turning around.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.41.
Place 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 run.
Long Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.00.
Place 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 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 I would be bullish above 111.41, and mildly bullish above 110.62. I think this has stood up quite well as the price mostly remained below 110.62 before finally getting above that level over the past few hours, and there are now signs that the price is leaning on it as support. The problem is that movement is very small in this pair and the action is quite choppy, so even though there is a very weak bullish trend and key levels are tending to hold, it is extremely difficult to make much profit. The European currency pairs are moving much more freely. The best that can be said is that if the price can remain above 110.62 for some hours, the picture will look more bullish. There are key USD data releases due later that might have a substantial impact on the price and produce much more volatility, so it could be dangerous to hold open trades into that time.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time, followed by the ISM Non-Manufacturing PMI at 3pm. There will be a release of Crude Oil Inventories data at 4pm, and finally the FOMC Meeting Minutes at 7pm.