Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 113.13.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time and 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 113.56 or 114.18.
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 was finally breaking strongly below the long-term bullish trend line. There was strong bearish momentum and I thought that we were quite likely to see 113.13 soon. I thought that what happened at that level was likely to be crucial during the Asian session later. The price made 113.13 easily and this did forecast a further drop by about another 33 pips. The price then recovered somewhat, but there are now initial signs of a bearish double top having formed at 113.40. The Yen is quite strong now after a period of relatively low volatility, so despite the long-term bullish trend, it would not surprise me if the price fell further soon. The bearish trend line shown in the price chart below is confluent with a generally resistant area above 113.40 and this area is likely to be pivotal now: failures there might provide nice short trade entries.
There is nothing important due today concerning either the JPY or the USD.