Yesterday's signals produced a long trade from the bullish pin candlestick which rejected the support level identified at 111.19. I would exit this trade at break-even immediately as it looks as if there is new resistance at 111.40 which is holding, making short-term movement very unpredictable, despite the medium-term weak bullish trend.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8am New York time until 5pm Tokyo time, during the next 24-hour period.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.86 or 112.15.
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 110.86 or 110.68.
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 wrote yesterday that it makes sense to be very cautiously bullish, and that if the price can go on to break above 112.15 with good momentum, then that would be a bullish sign that we would be likely to finally see some strong movement here.
The price has fallen over the past day, but the bullish trend line and nearest support level at 111.19 have continued to hold. The problem for bulls is that there is new lower resistance at 111.40 and the price looks very congested, making short-term predictions difficult, even though there is a weak bullish trend in force.
I would prefer to stand aside until the price gets above 111.40 or below the supportive trend line and 111.19.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15pm London time, followed by ISM Non-Manufacturing PMI at 3pm, and Crude Oil Inventories at 4pm.