Yesterday’s signals produced a nice long trade entry from the bullish break of the inside pin candlestick on the hourly chart just as New York opened. It might be wise to take more profit now as it looks as if the new higher support at 111.31 could break down under pressure soon.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 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 immediately upon the next touch of 111.63 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 110.88, 110.54, or 110.25.
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 action had picked up a little with the price breaking up to trade in line with a symmetrical bullish price channel. Recent hours saw the top of this channel broken, so despite the lack of a long-term trend, the picture is definitely looking more bullish. The support levels are obvious and have probably flipped from resistance, so any firm bullish bounces at any of the levels below should be good for at least a few long pips.
This was a good call as the first support level which was reached produced a very healthy, obvious bullish bounce which was good for approximately 40 pips. The break above the resistance at 111.31 was another bullish sign, but it looks as if the price will probably not be able to hold above it. The price really still needs to clear the 112.00 area before we get into strongly bullish territory, but another move up to at least 111.63 during the New York session is quite likely. I would be happy going long again from a bullish bounce at 110.88.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Core Durable Goods Orders data at 12:30pm London time.