USDJPY: Ranging price action
Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 108.63.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Ideas
⦁ Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.86, 109.13 or 109.48.
⦁ 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
⦁ Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.69, 108.45, or 108.27.
⦁ 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 yesterday that this pair was in a ranging environment and so bearish pressure was likely to step in again the closer we get to 109.00. I saw a short trade from a bearish rejection of the nearest resistance level at 109.13 as the best trade set-up which was likely to happen. This was a good call as the high of the day was made at about 109.08 as New York came online.
I see the ranging environment as likely to persist here, with neither currency showing much strength, as we have clusters of both resistance and support levels nearby. It still seems that the best opportunity likely to arise today would be trading a rejection of any extreme level, such as the support at 108.27 or the resistance at 109.13 (109.48 would be even better), so I would take the appropriate directional bias if we get a reversal at either of those levels.
There is nothing of high importance due today concerning either the JPY or the USD