USDJPY: Bearish below 108.77
Yesterday’s signals were not triggered, as there was no bullish price action when 108.96 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am to 5pm New York time Tuesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.77, 108.92, or 109.00.
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 it looked like the bears were going to win. I was ready to take a bearish bias later if the price could get established below 108.96 but I thought there would be better opportunities elsewhere. My basic analysis was right, but I was too pessimistic – this pair made a reasonably strong downwards move with good momentum, establishing several new clear lower resistance levels.
We have an inflection which can be seen on the left-hand side of the below price chart at about 108.45 which might prove supportive, but there are plenty of signs that the price will continue to move lower and maybe even reach 108.27 today.
I would take a bearish bias if we get a bearish bounce following a retracement to any of the resistance levels specified above. The USD is generally weak, and it seems like the Japanese Yen is finally catching up with the advances of other currencies against the greenback.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time.
It is a public holiday in Japan today so there are no JPY items scheduled.