USD/JPY: Both currencies moving together
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 may only be taken between 8am New York time Thursday and 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 108.21 or 108.59.
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 Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.23 or 107.01.
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 yesterday that I was anticipating an eventual breakdown below 107.00 but I thought that it was quite likely that neither would happen yet. I was correct that nothing technically significant would happen yet as the price has continued to consolidate.
The price chart below shows we are beginning to see a narrowing bullish triangle, with the price poised to either break down below the 107.50 area or break up past the 108.00 area. Volatility is relatively low and these two currencies both tend to strengthen or weaken at the same time as the market’s risk appetite fluctuates. This means trading this pair until that changes will be challenging.
I think the best potential opportunity now looks to be on the long side – a bullish bounce at the ascending trend line shown in the price chart below could see the price rise to the 108.00 area. Still, there probably will not be a lot of pips in such a move, so if you trade this be conservative and use a short time frame for both trade entry and exit.
Regarding the USD, there will be a release of Unemployment Claims at 1:30pm followed by Flash Manufacturing PMI at 2:45pm London time. There is nothing of high importance due concerning the JPY.