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 until 5pm Tokyo time Friday.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.89 or 111.46.
Put 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 110.40 or 110.27.
Put 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 wrote yesterday that I thought the price was most likely to range until the FOMC release due later, at which point it was more likely to breakout. Above 111.00, there was room to rise to 111.46, so I thought that a strong bullish move is a little more likely than a strongly bearish move. This was a good call as waiting for a bullish break above 111.00 before getting long was enough to stay out of trouble. The price continues to do little on relatively low volatility, and the resistance at 110.89 continues to hold the price down. The bullish price channel seems to have broken down, so a bearish move might be ahead.
The problem is that the price is congested and there is no obvious sign it will move in either direction. I still thing a break above 111.00 is the nearest blue sky the price might break into to make a significant move. I have no directional bias here beyond that.
There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.