USD/JPY: Yen somewhat stronger than dollar on risk-off sentiment
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 must be entered from 8am New York time Thursday until 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 107.12 or 107.59.
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 106.74, 106.43, or 106.15.
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 preferred to only look for short trades, taking a bearish bias once we got two consecutive hourly closes below 107.00 after New York opened, down to at least the next support level at 106.43.
This was a great call as the price has continued to fall over the past 24 hours and is now 15 pips below the entry point given by my call yesterday. It may be wise to monitor any open short trade carefully now on short time frames as the price is still moving down but doing it very slowly.
The technical picture is bearish but congested, meaning movements are less likely to flow strongly or be very predictable. This is because both of these currencies are strong in the increasing “risk-off” market environment, although the Yen is a little stronger, so we see the price of this currency pair decline. The problem is that there are many support and resistance levels to interrupt the flow.
I am generally bullish on the Yen, but I think it would be better to be long of the Yen today against weaker currencies than the USD, for example the GBP.
There is nothing of high importance due today concerning either the JPY or the USD.