USD/JPY: Both currencies relatively strong
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 108.59.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Thursday until 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 109.56, 110.52, 111.20, or 111.82.
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 108.50 or 107.86.
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 take a bullish bias if we got a bounce at any key support levels, but I thought that was unlikely to happen. I wanted to avoid trading this currency pair as I foresaw much better opportunities in being long of either of these currencies against commodity currencies or the British Pound.
This was a good call on both counts.
The technical picture is somewhat different as the USD continues to strengthen while the Japanese Yen comes under some pressure as the Bank of Japan floats the possibility of a stimulus. There is also increasing concern that the coronavirus situation in Japan may be worse than was thought. So, although the price is still well within its range of recent weeks, it is seeing an increasingly bullish trend, although this is not as strong as we are seeing in other USD currency pairs.
I will take a bullish bias on this pair if we get a retracement and bullish bounce at any of the nearby support levels identified above.
There is nothing of high importance scheduled today regarding either the JPY or the USD.