Yesterday's signals were not triggered, as the reversals in both directions took place slightly beyond the identified levels.
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 1H1 time frame H1H1H1 time frame immediately upon the next touch of 111.86.
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 110.80 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 yesterday that I was mildly bearish below 111.37 and that worked out fairly well for a gain of 30 pips or so before the price reversed later in the day with a strong bullish movement. Yet the bulls again faded away and the price fell quite strongly during the Asian and early London sessions. It seems clear that the price is in a medium-term bearish channel, which is wide, yet it remains difficult to forecast any larger movements in this pair, as action is quite congested. I do expect the support at 110.80 to be strong if it is reached, but I have no directional bias today.
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.