USD/JPY: Long-term resistance 110.07/30
Yesterday’s signals were not triggered, as the bearish price action was sloppy around the resistance level at 110.07, but this price area did more or less hold the high of the day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken 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 110.07 or 110.69.
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 109.54, 109.25, or 108.99.
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 thought that the best approach would be to wait for a decisive breakout above 110.07 after the New York open. This was an OK call as it was at least enough to keep out of any problematic long or short trades.
The technical picture is quite unchanged: we still see the price trying and failing to really breakout bullishly above this 110.00 area, and the longer this indecisive situation persists, the more likely we are to see either an explosive bullish breakout above the highs at 110.30 or so, or a strong bearish failure, and this pair is often driven by the performance of the S&P 500 Index from the U.S. stock market.
I would take almost exactly the same approach as yesterday and be ready to enter a long trade if there is a decisive bullish breakout above 110.12 after the New York opens. I would also be prepared to take a long trade from a bullish bounce at any of the support levels which may be hit today. If the price can close the day below 109.50, that would be a bearish sign however.
Regarding the JPY, there is nothing of high importance due today. Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time.