Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trades
- Go short following a bearish price action reversal on the H1 time frame imediately upon the next touch of 111.54 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 111.21, 110.88, or 110.54.
- 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 the picture still looked basically bullish as the price traded within a medium-term bullish price channel which is shown intact within the chart below. I would still take a bullish bias if we get a retrace to 111.21 and a strong bullish bounce there but I would be more bullish still above 112.10.
There is no real long-term trend, but bulls have certainly had mostly the upper hand over recent weeks. The buying of recent hours also looks quite healthy. For these reasons I am inclined to take a cautious and mild bullish bias.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CPI data at 12:30pm London time, and FOMC Meeting Minutes at 6pm.