USDJPY: 107.77 area looks pivotal today
Yesterday’s signals were not triggered, as none of the key levels given have been reached yet.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time Tuesday and 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 107.77 or 108.06.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.26, 107.21, or 106.72.
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 technical picture was more bearish as we are getting clear steps down. I thought that if the support level at 107.46 held into the New York session and we started to get a bullish turn, then it would be a sign that a long trade from that level had become a good idea. I was be inclined to be more bearish on this pair if the price can get established below 107.21 later on. This wasn’t a bad call as it was enough to keep out of trouble and I judged the important levels correctly, although it wasn’t enough to produce a winning trade.
The picture now is a little more bullish, as it looks like the price is going to invalidate the resistance level at 107.65 which I have discounted and continue to rise to hit 107.77 which looks as if it likely to be today’s pivotal point. If the price can get established above approximately 107.85, that would be a bullish sign. Be very careful about taking a short trade at 107.77 as the action now suggests it will break.
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.