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 from 8am New York time to 5pm Tokyo time, during the next 24-hour period.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 114.18 or 114.74.
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 113.56 or 113.05.
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 we could expect the price would shortly test the nearby resistance at 114.18. This was likely to be the pivotal level for the day. Although the price was never quite reached, the level was pivotal. We have a long term weak bullish trend, but the price is consolidating between the key levels in a way which gives no indication as to the likely direction of an eventual breakout. The odds are slightly biased in favour of bulls, due to the slight long-term trend, so I would take a bullish bias if the price can trade above the resistance level at 114.18 for a couple of hours.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of CPI data at 1:30pm London time, and the Chair of the Federal Reserve will be giving a minor speech at 11pm.