USDJPY: More bearish below 108.06
Last Thursday’s signals were not triggered, as there was no bearish price action at either of the resistance levels which were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered before 5pm Tokyo time Tuesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.06, 108.28, or 108.43.
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 107.50, 107.36, or 107.11.
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 last Thursday that the price was moving in wide swings well within its long-term range, so I did not see any exceptional opportunities ahead or reasons to focus on this currency pair. I saw the best approach as most likely to be scalping reversals at key levels for conservative profit targets. This was an OK call.
The picture now is more bearish as the USD remains quite weak, although the Yen is not particularly strong either. The Forex market at present is seeing most action in the commodity currencies.
I see the best opportunity today as likely to be a short trade down to 107.50 after the price either breaks below 107.70 with strong momentum, or after a failure to rise above 108.06 following a retracement – I would take a bearish bias in these cases.
The support levels beginning at 107.50 shown within the price chart below are likely to be strong.
There is nothing of high importance due today regarding either the JPY or the USD.