USD/JPY: USD is weak across the board
Last Tuesday’s Signals were not triggered, as there was no bullish price action when the support level identified at 107.02 was reached.
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
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.02 or 107.34.
- Place 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.
- Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trade Idea
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.21.
- Place 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.
- Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
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 last Tuesday that I thought that the round number at 107.00 would be very pivotal and could be traded long if it held, or short following a breakdown. I thought that there was probably greater potential on the short side, so I was ready take a bearish bias if we had gotten two consecutive hourly closes below 107.00.
This was a good call, although the break below 107.00 happened quickly and strongly, so my entry point at 106.67 only produced a maximum of 30 pips of profit.
The USD is weak everywhere and the Yen is one of the stronger currencies technically, as we see this pair breaking to new multi-week low prices below 107.00.
The price has made a bullish retracement, but it looks normal, so technically we can expect another test of the lows made recently as long as the price remains below 107.34 and that resistance level holds. The price has plenty of room to fall as there are no key support levels above 105.21. I would be very happy to take a short trade from a bearish reversal at 107.34 if this sets up later today.
Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time. There is nothing of high importance due today concerning the JPY.