USD/JPY: Resistance at 109.24 in focus again
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.24 or 109.74.
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 Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.27.
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 overall, I took 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.
I was right to be cautious, but wrong to be weakly bearish.
The intervention of the Chinese government to prop up the Chinese stock market and currency has boosted risk-on sentiment and helped stock markets recover, which has in turn helped the price of this “risk barometer” currency pair recover. The bottom was made near the support at 108.27.
The price is now getting close to 109.24 which has acted as pivotal resistance, as can be seen in the price chart below. This looks likely to be today’s pivotal point, so I would look to either trade a convincing bearish reversal short from that level, or to take a more cautiously bullish bias if we get a couple of consecutive hourly closes above it after New York opens.
There is nothing of high importance due today regarding either the JPY or the USD.