USDJPY: Bullish break but 108.76 holding
Yesterday’s signals were not triggered, as there was no bearish price action when 108.73 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.76 or 109.09.
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 Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.43 or 107.99.
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 yesterday that the price was still in a relatively congested area, but that if the price could break above 108.73 and challenge 109.09 it would have been a bullish sign, and a sustained break above 109.07 would have been a very bullish sign. What happened was a break above the resistance at 108.73 which held up for a few hours, but then fell back below the level which again looks to be resistant, just 3 pips higher. This is an indication that the bulls are not really able to push the price up, although the picture is looking more bullish and we may be getting close to a time where we get a real long-term bullish breakout to new multi-month highs.
Both the Japanese Yen and the U.S. Dollar are relatively strong right now, which is why the price of this currency pair is not moving a lot.
It looks as if the price is quite likely to continue down to hit 108.43 today which will probably be the day’s pivotal point. If it holds, the outlook is more bullish; if it breaks down, the outlook is more bearish.
I would not look to trade this currency pair today.
There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time.