USDJPY: Bulls fail again at 106.73
Yesterday’s signals were not triggered as none of the key levels were reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.73, 107.21, or 107.26.
- 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.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.25 or 106.69.
- 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.
- 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 double top at 106.73 looked like being a strong barrier of resistance.
This was a good call as the price was unable to even precisely reach that level before making a bearish turn and invalidating the former support level at 106.47. It now looks as though the price will continue moving down to reach the next support level at 106.25. I see this as likely to be today’s pivotal point: a bullish bounce might give another bull run up to 106.73, but a sustained bearish break could see a fall down to the 105.69 area, which has also been strong support. If 106.25 breaks down as New York comes online, I will take a bearish bias until 105.69 for today.
There is nothing of high importance due today concerning either the JPY or the USD.