USD/JPY: Weakly bullish with low volatility
Yesterday’s signals were not triggered, as the bullish price action took place a little way below the lower trend line of the price channel. The trend line has been adjusted accordingly and holds symmetrically.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.67, 108.04, 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 the lower price channel trend line shown in the price chart below which is currently sitting at about 107.40, or 107.23.
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 yesterday that the outlook was bullish, but that we might have seen a bearish reversal if the resistance at 108.04 was hit.
This was an OK call, although I got the lower trend line of the price channel a little wrong. It is readjusted now to catch yesterday’s low while still looking valid symmetrically.
We are seeing the price move up again in line with the still weakly bullish on low volatility technical picture, which is unchanged.
Bulls are currently testing the newest resistance level at 107.67. If the price can get established quickly above that level, it will be a small bullish sign.
I would only look for long trades in this pair today, but there is much more action elsewhere, for example in the EUR/USD or GBP/USD currency pairs.
Bullish stock markets are also helping to push the price up here.
If a long trade sets up from the lower trend line of the price channel, that would be the perfect opportunity here.
There is nothing of high importance due today concerning either the JPY or the USD.