USD/JPY: Risk-off shocks boosting Yen
Last Thursday’s signals were not triggered, as the bullish price action took place just below 108.62.
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 109.24 or 109.74.
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, 107.78, or 107.63.
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 this pair remains vulnerable to further declines as long as fears over the coronavirus outbreak continue to rise, but the moves will be stronger in Yen crosses with commodity currencies such as AUD/JPY and NZD/JPY.
I was ready to take a bearish bias here below 108.62.
These were good calls, as the price is now a little way below 108.62, and as the AUD/JPY currency cross fell by more than this currency pair did.
The picture is the same, with the market still dominated by waves of fear over the impact of the coronavirus. However, it seems that the Yen is not falling as strongly as it seemed it would last week, so arguably the outlook is a little less bearish.
Overall, I take a weakly bearish bias, and would look for short trades at rejections of resistance levels, especially at 109.24. However, bears should ideally wait for the price to get established below 108.27.
There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.