Yesterday’s signals were not triggered, as the bearish price action took place a few pips above the resistance level at 109.08.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time until 5pm Tokyo time today only.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.08 or 109.50.
Place 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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.34.
Place 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 I took no bias on this pair and saw better opportunities likely to arise in other currency pairs.
Yesterday we saw a rise to the area of resistance at around 109.08 which held, sending the price down to the nearest support level at 108.75. This support has held for a couple of hours but looks increasingly likely to break down. If we get a strong break and the price hold below 108.75 for a couple of hours, I would be prepared to take a bearish bias between 108.75 and 108.34, especially if the U.S. stock market is selling off also.
Zooming out and looking at the broader picture, we are seeing a medium-term consolidation below 109.08. If the price made a surprise rise to get established above 109.08 it would be a significantly bullish sign.
There is nothing important due today regarding either the USD or the JPY.