Last Thursday’s signals produced a profitable long trade following the hourly bullish engulfing candlestick which rejected the support level identified at 109.44, but it only produced approximately 30 pips of profit.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time and 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 109.44 or 110.04.
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 Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.15, or 108.73.
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 last Thursday that the price was still going sideways and seemed likely to consolidate between the new support at 109.44 and the resistance just above 110.00. I suggested looking for conservative profits off strong rejections of key levels in either direction. This was a good call and produced a small but profitable long trade.
The picture now is very slightly more bearish as 109.44 seems to have flipped from support to become new lower resistance, but the move does not yet look very convincing. Therefore, the support at 109.15 looks OK to me as a level. I have no directional bias and the best approach is likely to remain as it was – look for trades off strong rejections of key levels in either direction.
There is nothing of high importance due today regarding either the USD or the JPY.