USD/JPY: Weakly bullish price channel
Yesterday’s Signals were not triggered, as there was no bearish price action when the resistance level at 107.40 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.59, 108.04, or 108.21.
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 or 106.43.
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 thought we were more likely to see the price break out above 107.40 than break down below 106.74. I was ready to take a bullish bias on this currency pair later following two consecutive hourly closes above 107.50. This was a good call as I was right to look to the bullish side, but the price was unable to make two consecutive closes above 107.50 so this worked out well preventing what seems to have turned out to be a poor long trade.
The technical picture is a little more bullish now, as we have the breakout above the consolidating triangle, and the price is contained within a new, weak bullish symmetrical channel, all of which can be seen in the price chart below.
The problem for bulls right now is that we have a resistant confluence of the price channel’s upper trend line and the horizontal level at 107.59 which is proving to be hard to break.
Both currencies are quite weak, with little difference between them, suggesting we may not see a lot of price movement in this currency pair today.
As the level at 107.59 looks very likely to be pivotal today, and as the story of this week so far is increasingly bullish risk-on sentiment which should benefit the USD over the JPY, I will take a cautious bullish bias later today if we can get two consecutive hourly closes after the New York open above 107.59, up to 108.04.
There is nothing of high importance due today concerning the JPY. Regarding the USD, the Chair of the Federal Reserve will be testifying before the Senate at 3pm London time.