USDJPY: Possibly less bullish as price gets more congested
Yesterday’s signals produced a losing long trade from the support level at 110.29 after a small bullish pin candlestick rejected that level yesterday.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.88.
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 110.11 or 109.81.
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 I would take a bullish bias if the price made a firm bullish reversal after retracing back to the support level at 110.29. This wasn’t a great call maybe as there was a bullish reversal there which failed, although the reversal was small so arguably it wasn’t a firm reversal.
The two medium-term bullish trend lines are still holding, but the technical picture is getting less bullish as we have new lower resistance at 110.36 although it looks weak and relatively unlikely to hold.
I take no bias on this pair as stock markets are weak and prone to sell off which usually boosts the Yen against the Dollar.
There is no long-term trend and the price is in the middle of a multi-month price range. As bullish momentum appears to be dying, it seems impossible to see a move either up or down as having any more probability than its opposite.
It is probably worth standing aside from trading this pair right now.
There is nothing of high importance due today concerning either the JPY or the USD.