USDJPY: Long-term slow bullish breakout
Last Thursday’s signals were not triggered, as there was no bearish price action at 109.48 that day when it was first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken prior to 5pm Tokyo time Tuesday.
Short Trade Ideas
⦁ Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.96.
⦁ 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 108.91.
⦁ 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 I was a little worried that the level at 109.48 seemed to be holding again as resistance, but I had to take a bullish bias here as we have had a significant bullish technical breakout.
This was an OK call insofar as the price is a little higher now than it was then, although the rise is very weak and slow. Nevertheless, the price trading above 109.50 is technically significant and bulls have a small edge here. That edge will grow if the price is above 109.50 at the New York close later.
Bulls still need to worry about the low volatility and the absence of any obvious support levels above 109.00. The price could easily see a sharp downwards movement, although a continuation of the rise is the most likely scenario.
I would take a bullish bias if the price ends the New York session above 109.50 later.
There is nothing of high importance due today concerning the JPY. Regarding, the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.