Yesterday’s signals produced a profitable long trade from the bullish engulfing candlestick structure on the hourly chart which rejected the support level at 111.70 during yesterday’s New York session.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may be taken between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.10.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.70, 111.58 or 111.23.
- 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
Yesterday I wrote that I saw the higher support level at 111.70 as likely to be the pivotal level of the day, and I was looking for a long trade there. This was a good call and it worked out well, with the price shooting up from that area to finally break above the key long-term resistance at 112.10. However, the price quickly fell back to there is clearly a lot of selling above 112.00 and the break was a temporary thing. This is not a bullish sign, but as long as 111.70 holds up, we still have a chance for another push above 112.10 and a true bullish break. If this happens, it would be a very bullish sign for this currency pair. A break below 1.1170 is less interesting for bears as there are a few support levels close by: the line of least resistance looks to be upwards if 112.10 can be overcome.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.