Yesterday’s signals were not triggered, as the bearish price action took place above 112.83.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time, during the next 24-hour period.
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 Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 112.72 or 112.19.
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 if the price was unable to break above 112.83 over the coming hours, it would turn around and begin to fall. I would be cautiously bearish if the price turned sharply bearish from 112.83 as the New York session got underway later. Conversely, a sustained break above 112.83 could be a bullish sign, especially if it is accompanied by a strongly bullish move in U.S. stocks.
This was a good call, as the price got established above 112.83 quite easily and continued to rise even after the Dollar stopped gaining against other currencies.
The price has established new higher support at 112.72 and can be seen to be in a very weak but bullish long-term trend, which strengthens the bullish case. However, I believe this pair is still prone to easy turns and deep counter-trend pull backs. The price now seems to be failing at a resistant trend line, so a bearish retracement to 112.72 looks likely, although we may find support at the round number of 113.00 before that.
I have no directional bias.
There is nothing important due today concerning either the JPY or the USD.