USDJPY: Strong resistance from 108.43 to 109.00 holds
Yesterday’s signals were not triggered, as none of the key levels were reached over the day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.43, 108.71, or 109.00.
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 107.91, 107.46, 107.26, or 107.21.
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 although we were seeing weakly bullish conditions prevailing, the problem for bulls was that this area above the current price was likely to be very resistant generally all the way up to 109.00. For this reason, I was watching for a bearish reversal at any of the resistance levels noted above the current price.
This call was enough to keep out of trouble, as the price did very little over the past 24 hours and did not even reach either of the nearby key support and resistance levels.
There is no change to yesterday’s broad technical analysis, and this pair is likely to react sharply to the FOMC releases due later. I see the best potential here as a spike up to a key resistance level followed by a fast, bearish reversal short trade entry, the closer to 109.00 the better, following the FOMC releases.
There is nothing of high importance due today concerning either the JPY or USD.