USDJPY: Ranging but more bullish as 108.56 holds
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.75 or 109.07.
Put 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 108.20.
Put 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 last Thursday that the picture had become a little more bearish due to the new lower resistance level forming at 108.56. There was support at 108.22 and if this broke down, then the picture would become much more bearish due to the long-term bearish trend and the fact that the price is close to multi-week lows not far below 108.00.
I was ready to take a bearish bias later if the price could get established below 108.22 after New York opened.
I was correct to be bearish as the price moved down during the New York and Asian sessions, but the price could not get established below 108.22 in time. This was fortunate, as the price has rebounded quite strongly from 108.20, and established new higher support at 108.56, although this is weak.
There is not really a good long-term trend in this pair, it has basically been ranging over the past year or so despite making some interesting lows, with money tending to flow into the Japanese Yen every time the U.S. stock market sells off. What we see now is basically a consolidation between 108.20 and 108.75 which is relatively narrow. I think the next interesting trades are either going to be a short from 108.75 or a long from 108.20.
I have no directional bias today.
There is nothing important due today concerning either the JPY or the USD.