USDJPY: Short-term bullish break above 108.30
Last Thursday’s signals were not triggered, as there was no bullish price action at 108.07.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.50, 108.79, or 109.00.
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 108.07 or 107.78.
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 following the bearish failure to remain above the key pivotal point at 109.00, the price was still showing bearish momentum, so I was looking to take a short bias if we had gotten a bearish bounce at any of the key resistance levels following a bullish retracement. This was a good call as the price continued to move down quite strongly over the rest of the day, but the price never retraced to a key resistance level.
The picture now is more bullish, as we have seen bottoming-out price action below the support level at 108.07, which has now become re-established as support at 108.06. The bullish action has also advanced to flip the recent resistance level at 108.30 to become new support.
These are bullish signs, and the bullish case for this currency pair is strengthened by the fact that the S&P 500 stock index is rising to hit new all-time highs, which typically pulls this currency pair along with it.
Overall, I see the price here as evenly balanced between 108.30 and 108.50 with no clear direction ahead. Therefore, the best approach to trading this pair today would probably be to look for a long at 108.06 and a short at 108.79.
There is nothing of high importance scheduled today concerning either the USD or the JPY.