USDJPY: Bulls face test at 106.73
Last Thursday’s signals were not triggered, as none of the key levels were reached yet.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.73, 107.21, 107.26, or 107.57.
- 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.
- 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.25 or 106.69.
- 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.
- 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 I thought the price would again reach 105.69 and if the price got established below that level it could test the recent lows just above 105.00 again or even break lower than that. This was not an accurate call as the price simply kept advancing slowly, never breaking the crucial resistance at 106.73 but printing new higher support at 106.25.
The long-term trend is still bearish, but the U.S. stock market seems to be recovering and driving the price up here. However, the double top at 106.73 looks like being a strong barrier of resistance.
I have no directional bias and I see the best approach in this currency pair today as likely to be scalping reversals off any nearby key level in either direction.
There is nothing of high importance due today concerning either the JPY or the USD.