USDJPY: Slow medium-term bearish trend
Yesterday’s signals were not triggered, as the bearish reversal at the resistance level at 107.77 unfortunately happened before 8am New York time.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.65, 107.77, or 108.06.
- 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.72 or 106.44.
- 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 Analysi
I wrote yesterday that the price was likely to continue to rise to hit 107.77 which looked as if it was likely to be the day’s pivotal point. I did say also to be careful about taking a short trade off 107.77 so it wasn’t a perfect call, but it was on the right track in seeing that level as pivotal.
The picture now is weakly bearish, in line with the long-term bearish trend. If the new resistance level at 107.38 holds firm, we are likely to see another move down in price today to at least the round number at 107.00. I am less optimistic on the bullish side if the price breaks above that level, there will probably be more potential on the short side, so in that sense at least, 107.38 is likely to be today’s pivotal point.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.