USD/JPY: No long-term trend
Last Thursday’s signals produced a profitable long trade from the strong bullish pin candlestick which rejected the support level at 107.23.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday to 5pm Tokyo time Tuesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 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 Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.23 or 107.01.
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 last Thursday that it looked as if the price was going to consolidate but might take a bearish turn if the U.S. unemployment data due later that day was considerably worse than expected. This was a good call as the price has remained between the closest support and resistance levels ever since then, continuing to consolidate.
The USD is strong but so is the JPY as both are relative safe havens and safe havens are strong today, with stock markets ticking down and Gold also rising a little as well. These movements are nothing special, but I think investors are still in denial over the extent of the economic damage which will begin to be revealed as part of the impact of the coronavirus pandemic. However, it is hard to say whether this will strengthen the USD or JPY more, so this pair is likely to range for a while. There is no long-term trend to exploit here.
I would be comfortable taking longs from bounces at any support level or shorts from rejections at any resistance level.
There is nothing of high importance due today concerning either the JPY or the USD.