USD/JPY: Both currencies relatively strong
Yesterday’s signals were not triggered, as there was no bullish price action when the support level identified at 105.68 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Tuesday to 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 107.48 or 108.59.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.21 or 104.09.
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 saw the best strategy to trade this pair would be to look for reversals from key levels in either direction, with the support at 105.68 looking very pivotal at the time of writing. This was a good enough call to keep anyone out of trouble, but I was wrong about 105.68 being very important.
We see the consolidation continue and generally, Forex markets are starting to calm down as Europe and the U.S.A. begin to adjust to the new reality of the impact of the coronavirus pandemic.
As the consolidation pattern continues to hold, I continue to see the best opportunities here as likely to be in trading reversals from key levels identified above in any direction, while monitoring closely to ensure nimble profit-taking.
There is nothing of high importance scheduled today regarding the JPY. Concerning the USD, there will be a release of Retail Sales data at 12:30pm London time.