USDJPY: Pivotal area 109.50 / 110.00 still in play
Last Thursday’s signals were not triggered, as the price was already below the support level identified at 109.52 by the time New York opened.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Monday and 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 109.52 or 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 108.96 or 108.27.
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 we were likely to soon either see a strong bullish move to new long-term high prices, or a meaningful downwards move. I was ready to take a bullish bias if the price could get established above 109.70.
This was a relatively good call as the price has stayed below 109.70 and seem to be starting to inch down, but it is true that the major move I was anticipating has not happened yet.
The best that can be said is that the price seems unwilling to really turn bearish, but also is unable to breakout bullishly and advance to the area beyond 109.70 or even better 110.00.
I think it is wise to sit tight on this pair for the time being and wait for the price to get to 109.70 and either succeed or fail to break it, although a bearish reversal close to 109.50 might also give a profitable short trade entry. Probably this will not happen until Thursday or Friday at the earliest.
There is nothing of high importance due today regarding either the JPY or the USD.