USD/JPY: New resistance level near round number at 107.00
Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8 am New York time Thursday and 5 pm 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 107.05 or 107.86.
- 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 106.43 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 a break above 107.86 was looking more likely now, although I was not strongly convinced that it would happen.
I was mildly “wrong” as the break did not happen and the price action was weakly bearish, printing a new lower resistance level at 107.05 confluent with the round number at 107.00.
The last few hours have seen a bullish move, but overall, the price moves little in this currency pair, as both currencies act as safe havens and tend to go up or down at the same time.
Having said that, we are seeing hints that a long-term bearish trend is developing, and once we get a daily close below 106.00 that will be a very significant bearish breakdown.
For this reason, I see the support level nearest 106.00 at 106.15 as likely to be very pivotal, so I would certainly be ready to take a long trade there if it is reached and produces a bullish bounce.
There is nothing of high importance scheduled today regarding either the JPY or the USD.