USDJPY: Ranging between 108.25 and 109.00
Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.94.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.27, 108.06, 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 yesterday that I continued to take the same approach: respecting the range between 108.25 and 109.00 and so looking for a long trade from a bullish bounce at 108.25. This might still be a valid approach today, but the major U.S. inflation data release plus the FOMC’s monthly output due later are likely to produce a strong reaction in this currency pair and finally produce a breakout from this price range.
A good approach to trading this pair today is likely to be waiting for the FOMC release and being ready to trade reversals from any big initial spike to a key price level identified above. The further away from the current price, the better.
There is no long-term trend in this currency pair to exploit right now.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time and the FOMC Economic Projections, FOMC Statement, and Federal Funds Rate at 7pm plus the usual press conference half an hour later.