USD/JPY: No long-term trend
Last Tuesday’s signals were not triggered as the bullish price action took place slightly below the support level identified at 107.02. However, this level did cap the swing low of this week so far very effectively.
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 107.00.
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 it looked as if the price was taking a bearish turn again and getting ready to move down to the round number at 107.00. I wanted to take a bearish bias if we had gotten a bearish price action rejection of either resistance level at 107.80 or 108.21.
This was a good call as although the price never quite reached 107.80, the price did fall from 107.75 and hit the round number at 107.00, from where it rose again, and I saw support at 107.02.
The picture now is more consolidative as markets await U.S. unemployment data later today which may provide more direction to the price action in this pair. For now it looks as if bulls and bears are evenly matched, but if the data is much worse than is generally expected (5.35 million new claims), that could push the price down, so I would take a short bias if that happens and the price makes a firm bearish reversal at 108.21.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.