Yesterday’s signals were not triggered, as none of the key levels were ever reached.
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 Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.56 or 114.18.
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 112.41.
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 the bearish trend line shown in the price chart below was confluent with a generally resistant area above 113.40 and this area was likely to be pivotal: failures there might have provided nice short trade entries. In a way, this wasn’t a bad call as the price never managed to get above 113.32. The price is rising now after a period of consolidation, and is not far from the bearish trend line, so it may well find it hard to rise much further. I think that much will depend upon the U.S. stock market at the New York open later today. If we see another sell-off which gathers pace, the Japanese Yen is usually a safe-haven destination upon stock sell-offs, so we may be setting up for a downwards movement.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of PPI data at 1:30pm London time.