Last Tuesday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8am New York time to 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 112.57.
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.
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 Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.66, 111.43, or 111.31.
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.
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 noted last Tuesday that the bullish price channel and support levels remain intact, so I thought it was looking likely that there would not be any major technical developments until the Bank of Japan’s input due later. Until then, it would probably be a superior approach to play any rejections of any key levels for a few pips only in either direction.
I was correct as the price channel has held, and this has continued even beyond the Bank of Japan’s release and is still the situation now. Price movement is weak, and we see the price as having a tough time rising above the 112.40 area. Therefore, it is looking increasingly likely that the price will break down with an increase in volatility. This means that I would have a bearish bias if the price breaks convincingly below the lower trend line of the channel shown in the price chart below. A strong bearish reversal off 112.57 should also be a great short trade entry if it happens due to the confluence there of a trend line, resistance level, and the psychological importance of 112.50.
There is nothing important due today concerning either the JPY or the USD.