USDJPY: Strong resistance from 108.43 to 109.00
Yesterday’s signals were not triggered, as there was no bearish price action at 107.91.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time Tuesday and 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 108.43, 108.71, or 109.00.
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 107.91, 107.46, 107.26, or 107.21.
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 yesterday that the price was making another minor bearish dip from new lower resistance at 107.91. I saw no standout bearish move yet and thought that there may still be buyers at the 107.50 area. This was a broadly correct call, with the price rising over the past day after making a low at 107.68.
The price is back up above 107.91 and has made a new multi-week high price. So, we are still seeing weakly bullish conditions prevailing. The problem for bulls is that this area above the current price is likely to be very resistant generally all the way up to 109.00. In addition to that potentially bearish factor, we are likely to see money flow into the Yen as a safe haven if there is any further conflict in the Gulf. For these reasons, I think the smart money will be watching for a bearish reversal at any of the resistance levels noted above the current price, and I would take a bearish bias if we get such a set-up later today.
There is nothing of high importance due today concerning either the JPY or USD.