USD/JPY: No long-term trend
Last Thursday’s signals were not triggered as the bearish price action at 107.32 did not play out until after the end of the Tokyo session.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.86 or 108.23 or 108.54.
- 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 106.43.
- 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 last Thursday that there were signs that the price was finding enough support to halt the downwards movement, although it was a little too early to tell. I thought long trades would have the most potential, but I took no directional bias.
This was not a correct call as the price basically continued to move downwards, although I was not very wrong about the relative lack of direction.
We are now seeing a consolidation pattern playing out because both currencies are strong as safe havens in the risk-off environment which is dominating markets.
I again take no directional bias here and would be prepared to enter trades from reversals at either support or resistance levels.
The short-term price action suggests a small recovery which seems likely to produce somewhat higher prices over the next few hours.
Regarding the JPY, the Bank of Japan will be releasing its Monetary Policy Statement towards the end of the Asian session. There is nothing of high importance due today concerning the USD.