USD/JPY: Resistance at 107.80 continues to hold
Yesterday’s signals were not triggered as none of the key levels have been reached yet.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered 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 107.80, 108.21, or 108.59.
- Put 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.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.02.
- Put 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.
- 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 we may see the price start to fall here if the U.S. stock market also begins to sell off again.
I was ready to take a bearish bias if we had gotten a retracement to the resistance level at 108.21 followed by a bearish reversal.
I was broadly right to look to the bearish side as the old resistance level at 107.80 has continued to hold, and it looks as if the price is taking a bearish turn again and getting ready to move down to the round number at 107.00. However, much will probably depend upon how the U.S. stock market acts when it opens later today – it rose in off-hours trading earlier after falling yesterday, so the outlook still looks unpredictable beyond our knowledge that the bullish retracement has reached a key technical level.
I will take a bearish bias if we get a bearish price action rejection of either resistance level at 107.80 or 108.21.
There is nothing of high importance due today concerning either the JPY or the USD.