Yesterday’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 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 113.13.
- 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 Trade
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 112.41.
- 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 yesterday that the price had continued to advance, and the long-term bullish price channel remained intact. However, there were short-term signs that the move up has run out of steam just below the round number at 113.00. I remained essentially bullish above 112.41 but thought that we may well need a retracement before another good opportunity entry presents itself. This was a good call as the price did not rise much more before pulling back, although it does not look like it is ready to rise yet over the short-term. Technically, the bullish price channel remains intact and healthy. It is likely that nothing much will happen before the FOMC releases due later, and the channel is likely to hold until that time.
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 Statement, Federal Funds Rate, and Economic Projections at 7pm, and the usual press conference half an hour after that.