USD/JPY: Important Forex pair to watch
Yesterday’s signals were not triggered, as the support level identified at 103.07 was missed but by only 1 or 2 pips.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 104.09, 105.66 or 106.00.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 103.07.
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 would be more bullish above 106.00 and more bearish below 103.50. This was a relatively OK call as although I was right about staying somewhat bearish below 106.00, the price did manage to break below 103.50 before rebounding, with the support level at 103.07 holding instead. However, there is now new lower resistance at 104.09, so the technical picture does look more bearish here today.
This pair is the key to the Forex market right now, as it reacts the most strongly to the deteriorating global economic situation. I take a bearish bias here as long as the price stays below the resistance level at 104.09. A bearish rejection of that level later today could be an excellent short trade opportunity, but all trades should be closely monitored on short time frames due to the very volatile market environment.
There is nothing of high importance due today regarding either the JPY or the USD.