USDJPY: Bearish below 108.02
Last Thursday’s signals produced a nicely profitable short trade from the bearish rejection of the resistance level identified at 108.00.
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 108.02, 108.15, or 108.48.
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 Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 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 picture here had become more bearish, with the price showing the price established within a wide bearish channel. This suggested that the best opportunities in this pair which may set up soon would be either a strong bearish break below the 107.50 area (which seemed to be strong support), or a bearish failure after a bullish retracement to 108.00 or higher, ideally rejecting the upper trend line of that price channel.
It took a while to happen, but the latter scenario is playing out now with the bearish double top forming at 108.02 which is confluent with the upper trend line of the bearish price channel. This is a bearish sign and alternatively, if the price can turn bullish and get established above 108.15 later it would conversely be a bullish sign.
There is nothing of high importance due today regarding the USD. Concerning the JPY, the Governor of the Bank of Japan will be giving a speech before the International Monetary Fund at 4pm London time.