Last Thursday’s signals were not triggered, as there was no bearish price action at 108.73.
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
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.04 or 110.52.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.15.
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 I would have a bearish bias if we got a firm break and hold below 108.34 during the New York session. Exactly the opposite happened, but I was at least able to stay out of trouble. We have seen a strong rise here since then, enough to highlight this pair as the major mover of the market. This has been caused by renewed strength in the U.S. Dollar and also by weakness in the Yen since the Bank of Japan reduced its growth and inflation forecasts. It is a strong move, but it is also a counter-trend move, so is liable to run out of steam. The price is now close to the psychological level at 110.00 which is also confluent with resistance at 110.04. I think this is likely to hold but I would still be nervous taking a bearish reversal there today. There is probably new support at 109.74 but the level looks doubtful, so I would instead prefer a long trade from a bounce at 109.15.
I have no directional bias on this pair today.
There is nothing of high importance due today regarding either the JPY or the USD.