USD/JPY: More bearish on souring risk sentiment
Yesterday’s signals were not triggered as the initial supportive price action at the support level of 107.02 was insufficiently bullish to justify a long trade entry.
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 Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.62.
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 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.
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 a break below 107.00 would have enough room to fall all the way down to 105.21, so the price had room to fall. For these reasons, I would take a bearish bias if we had gotten two consecutive hourly closes below 107.00 after New York opens.
I think this was a good call as although we did not get this breakdown, it looks even more likely to happen as the price is just consolidating heavily above the support confluent with the round number at 107.00. The U.S. stock market also looks quite heavy and prone to a breakdown later today. So, I still wait for two consecutive hourly closes here below 107.00 as a short trade entry signal, ideally on increasing short-term volatility, as there are no key support levels below 107.00 until 105.21 so the price has plenty of room to fall.
There is nothing of high importance scheduled for today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.