USD/JPY: Yen getting weaker over time
Yesterday’s signals were not triggered, as none of the key levels were ever 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 111.82, 112.40, or 112.93.
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 109.49 or 108.50.
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 thought it was not wise to be short the USD these days against anything, so I expected this weak bullish trend to continue here, and I would be prepared to take long trades from any firm bullish bounces at any support level which may be reached.
We are seeing a bit of a pullback by the USD, but the only effect that is having here is to make the price consolidate, and it is still a bullish consolidation. I see the USD as likely to strengthen further over the medium term, so I continue to take a weakly bullish bias if the price bounces at any of the identified support levels – I would not take any short trades yet. Volatility here is relatively low compared to other USD currency pairs.
Regarding the USD, there will be a release of Flash Manufacturing PMI data at 1:45pm London time. There is nothing of high importance scheduled today for the JPY.