USDJPY: Support at 105.66 survives so far
Yesterday’s signals may have produced a long trade entry from the bullish bounce at the support level identified at 105.66 right at the end of the previous Asian session.
Today’s USD/JPY Signal
Risk 0.75%.
Trades may only be entered between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.73.
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 Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.66.
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 price had bounced back very strongly from the bearish weekend gap, not only filling the gap but sending the price back up above the old resistance level at 105.69 which had become probable support now at 105.66. I thought that an end to the day below that level would be a bearish sign.
This was a good call as the level has proven itself to be a pivotal point so far, holding up and giving some hope to bulls.
If the price can rise from here, despite the long-term bearish trend, it would be a bullish sign, so I see 105.66 as continuing to be the important pivotal point today.
I would take a bearish bias below 105.40 but would be very weakly bullish above 105.66.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.