USDJPY: Ranging as 108.20 holds
Yesterday’s signals were not triggered, as none of the key levels were reached within the specified time.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday until 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 108.55, 108.75 or 109.07.
Place 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 Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.20.
Place 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 what we were seeing was basically a consolidation between 108.20 and 108.75 which is relatively narrow. I thought that the next interesting trades were either going to be a short from 108.75 or a long from 108.20. I had no directional bias.
This was a good call and we are seeing the support at 108.20 hold so far although it was only reached an hour or so ago. It is quite possible that the price will move up from here, but the turn may take a while to happen. To take a bullish bias from 108.20 I would want to see a strong bullish bounce there as it has already been touched. A sustained break below 108.20 would be a bearish sign, especially if it happens at the same time as a U.S. stock market selloff. It is clear that 108.20 will be today’s pivotal point. I have no directional bias today.
There is nothing important due today concerning either the JPY or the USD.