USDJPY: Strong support area around 108.07
Last Thursday’s signals were not triggered, as the bullish price action took place a little way below the support level identified at 108.61.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered 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 108.72 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.07 or 107.77.
- 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 last Thursday that the area between 108.60 and 109.00 was a very key pivotal zone, marking a long-term multi-week double top. The price has failed to clear 109.00 so in a sense the zone has continued to act in a pivotal way. With the establishment of a new lower resistance level at 108.72, it seems as if the bears are slowly winning here. However, the support at 108.07 is likely to be strong, as it is confluent with an old supportive trend line. This means that the price is likely to get to that level, where there may be another opportunity to go long.
Despite the strategic positioning of support and resistance, there is no doubt that this is not one of the most active pairs in the market right now, with both the U.S. Dollar and the Japanese Yen being relatively weak over the medium term.
I would be prepared to take a bullish bias if we get a solid bounce at 108.07 later today.
There is nothing of high importance due today concerning either the JPY or the USD.