USDJPY: Slow bearish price channel
Yesterday’s signals produced a profitable long trade from the bullish doji rejection of the support level identified at 108.27. This has already given the minimum 20 pips of profit and is a counter-trend trade so it may be wise to close out any remaining profit now.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Thursday and 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 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 108.27, 108.06, or 107.78.
⦁ 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 there was perhaps a stronger bearish case now as the price chart showed a fairly wide symmetrical bearish price channel. The price channel meant that 108.06 looked an attractive entry point for a long trade while 108.86 looked best placed to produce a good short trade entry. However, neither level was hit. The price has continued to inch down in sync with the bearish price channel but with quite choppy price action.
I see the best opportunity as likely to be a short trade from 108.86 due to the confluence of horizontal resistance and the upper bearish channel trend line at this point, but a long from 108.06 could also be interesting. If we get a reversal bounce at either level, I would take a bias following the reversal for a trade.
There is nothing of high importance due today concerning the JPY or the USD.