USDJPY: Bullish above 108.63
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 prior to 5pm Tokyo time Thursday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.07 or 109.48.
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 Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.63 or 108.28.
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 I took a weakly bullish bias above 108.63 and a bullish bounce there could also be a good trade, on the long side. In addition, I was seeing 109.07 as likely to be strong resistance which would hold over the short-term.
This was a fairly good call, as the price has risen slightly but seems to be topping out just below 109.00. The price might get a little higher, but a move down to 108.63 at least looks to be coming. The situation is made more unpredictable, however, by the FOMC minutes release coming up later which tends to have quite a lot of impact upon the USD/JPY currency pair.
I see the best potential trade set-up in the near term as likely to be a post-FOMC release spike up above 109.07 which quickly falls down to at least the 108.63 area, so I would be prepared to take a short bias if that set-up comes to be later.
There is nothing of high importance due today regarding the JPY. Concerning the USD, the Chair of the Federal Reserve will be testifying before the House of Congress at 3pm London time, and there will be a release of FOMC Meeting Minutes at 7pm.