Yesterday's signals may have produced a short trade from the bearish pin candlestick which rejected the resistance level at 110.47 just a few hours ago. At the time of writing, this short trade would be in a small profit, but the trade should be managed carefully if open as there is a strong bullish higher low at 110.00.
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 110.65 or 111.14.
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 Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.04.
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 yesterday that I would be most interested in a bearish reversal at about 110.40 or 110.50 due to the confluence of the broken major trend line, the horizontal resistance at 110.47, and the half-number at 110.50. I had no directional bias apart from that. It seems that this might have been a good call as we just saw what looks like a bearish reversal at 110.47. I will have a bearish bias over the coming hours as long as the price continues to fall from here, even if slowly, but I note there is new support at 110.04 which is both a major first higher low, and also confluent with a very large psychological level at 110.00, so I can only be bearish with extreme caution.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time, followed by the FOMC Meeting Minutes at 7pm.