107.00 looks very pivotal
Yesterday’s Signals produced a profitable long trade from the bullish rejection of the support level identified at 107.02, but this trade only gave the minimum 20 pips of profit to break even.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Tuesday and 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 107.34 or 107.59.
- 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 although the price was looking weaker due mostly to a weak USD, the price would quite likely not manage to get below the lower support level at about 107.00.
I was ready to take a long trade at a bullish bounce at 107.02 but without much confidence – I suggested monitoring such a trade very carefully on a short time frame.
This was a good call as the price bounced at 107.02 but only made about another 20 long pips of profit before printing new lower resistance at 107.34.
The price is now sitting on the support at 107.02 which is looking extremely pivotal. The price has a long way to fall if it makes a sustained break below this level, more than 100 pips without any key support.
I think the round number at 107.00 will be very pivotal and could be traded long if it holds, or short following a breakdown. There is probably greater potential on the short side, so I would take a bearish bias if we get two consecutive hourly closes below 107.00.
There is nothing of high importance due today concerning the JPY – it is a public holiday in Japan today. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.