USD/JPY: Today may see a renewed flow into safe havens
Last Thursday’s signals were not triggered as there was no bullish price action when 108.61 was first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Monday and 5pm Tokyo time Tuesday.
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 107.80 or 107.02.
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 Thursday that the I thought this dominant consolidation pattern would hold, so I would again look for reversals off either key level without any directional bias. This was not a good call as the price broke down below the support level at 108.21 not long after New York opened.
The price has continued to fall as stocks have generally taken a more bearish turn since trading opened this week in the far east. The U.S. stock market seems to have sold off from the halfway point of its recent sharp decline, which suggests this may be the start of a major bearish reversal – if so, we can expect that this currency pair may fall considerably also.
I will take a bearish bias if we get a retracement to the resistance level at 108.21 followed by a bearish reversal.
There is nothing of high importance due today concerning either the JPY or the USD.