Yesterday’s signals were not triggered, as there was no bullish price action at 111.23.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.69, 111.90, or 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 Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.88.
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 yesterday that it was quite likely we would see spikes and reversals following the FOMC release – I thought that a fast spike down to 110.88 and a buy limit order there could be an interesting and successful trade. I had the right idea as there was a fast move down which quickly reversed, but it only reached 111.00 and not 110.88.
The situation is still slightly bearish as long as the price is unable to break above 111.69, and the bulls appear to have failed there again in recent hours. That is a mildly bearish sign and the short-term price action is a little bearish. However, the longer-term picture remains evenly balanced.
I suspect the price will consolidate now until the non-farm payroll releases due tomorrow after Tokyo closes so I have no directional bias today.
There is nothing important due today concerning either the JPY or the USD. It is a public holiday in Japan today.