USDJPY: Bullish consolidation above 108.61
Yesterday’s signals were not triggered as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.00 or 109.48.
- 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 1H1 time frame immediately upon the next touch of 108.61, 108.07, or 107.77.
- 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 action still looked bullish, especially if the support at 108.60 held up. It did so, and we are now seeing a bullish consolidation. This area between that level and 109.00 is a very key pivotal zone, marking a long-term multi-week double top. If the price can get established above 109.00 it will be a very bullish sign. I am prepared to take a bullish bias if we get two consecutive hourly closes above 109.00. Alternatively, the price could be quite likely to make a major move down from here if it keeps failing to get above 109.00, so this currency pair is worth paying attention to right now.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Philly Fed Manufacturing Index data at 1:30pm London time and Crude Oil Inventories at 4pm.