USDJPY: Look for bullish breakout beyond 109.00
Last Thursday’s signals were not triggered, as none of the key levels were reached within the specified time.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday to 5pm Tokyo time Tuesday.
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 H1 time frame immediately upon the next touch of 108.50 or 108.07.
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 last Thursday that the best opportunities in this currency pair were likely to be short trades from 108.72 or 109.00, but again, the price may not be ready to fall much unless there was some news that spooked global stock markets. I took no directional bias.
This was a very good call as it reflects what has happened since that time.
This pair is worth focusing on, as the resistance level at 109.00 is a very strong, long-term pivotal point. The price has continued to slowly inch up and make higher lows, without breaking above 109.00, signalling a strong bullish breakout above 109.00 is increasingly likely. Another bullish sign is that the ascending trend line which is shown within the price chart below has continued to be respected by the price.
I am looking for a bullish breakout beyond 109.00 for a long trade entry and would take a bullish bias if the price can close today above 109.00.
If a bullish breakout at 109.00 fails decisively, we could see a short trade opportunity instead. Much will probably depend upon how the U.S. stock market performs today, as the S&P 500 Index is testing all-time high levels and may go on to breakout strongly, which would tend to boost this currency pair with it.
There is nothing of high importance due today concerning either the JPY or the USD.