Last Thursday’s signals were not triggered, as there was no bullish price action when the price reached 111.70 or 111.58.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trades
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.79 or 112.10.
- 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 Trades
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.38 or 111.23.
- 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 last Thursday that as long as 111.70 held up, we still had a chance for another push above 112.10 and a true bullish break. A break below 1.1170 was less interesting for bears as there were a few support levels close by: the line of least resistance looked to be upwards if 112.10 could be overcome.
This was a good call, as the bearish scenario played out, but I was right to suspect there wouldn’t be a lot in it as the residual bullishness would hold the price up quite a lot. However, it is also true that we have lower resistance at 111.79 which is holding, and we may now be seeing a bearish double top there.
There is a weak long-term bullish trend, but it is very weak. It is also a holiday in Japan which means that volatility is quite likely to be below average. For these reasons I see little opportunity in this currency pair except for scalping a few pips off bounces rejecting key levels.
There is nothing important due today concerning either the JPY or the USD. It is a public holiday today in Japan.