USDJPY: Bearish, test of 109.00 in view
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.81 or 110.11.
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 Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.07 or 108.73.
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 the price was starting to look more bearish, but there were reasons to see the support just above the round number at 109.00 as strong. If the U.S. stock market fell strongly later, it would probably push the price to reach the area below 109.00. Generally, I was looking for short trades and not long ones, but the only reliable resistance I saw anywhere nearby was some distance further up at 109.81.
This was a good call as the price continued to fall and stock markets have continued to sell off. A sustained break below 109.00 would be technically significant and see the price begin to make new long-term lows. If we are going to see a real return of a bear market in stocks, that is also likely to mean a bear market in USD/JPY.
I definitely see 109.00 as a very key pivotal point, and I would take a bearish bias if the price can trade below that level for a couple of hours consecutively later today.
There is nothing of high importance due today concerning either the JPY or the USD