USDJPY: More bullish but 106.73 still holds
Yesterday’s signals produced a profitable short trade from the bearish doji candlestick which rejected the resistance level identified at 106.73. This trade has already hit the minimum profit so the stop loss should have been moved to break even by now.
Today’s USD/JPY Signals
Risk 0.75%.
Trades can be entered between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.73 or 107.21.
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 106.08, 105.86 or 105.57.
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 ongoing consolidation between 105.86 and 106.73 was likely to continue over the day, but the technical picture would begin to look more bullish if the support level at 106.09 held also.
This was a good call as the levels held, and as the price remained above 106.09 but mostly moved up, entirely accurate.
The resistance at 106.73 has held firmly again, so we still have the range, but I would prefer a long to a short trade today if it sets up – ideally from a bullish bounce at 106.08. If it happens, I would take a bullish bias. However, this pair is still very range-bound so profit targets should be relatively conservative unless there is a dramatic change.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time, followed by Crude Oil Inventories at 4pm.