USD/JPY: Improving risk sentiment weakens Japanese Yen
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at 107.05 was hit.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.02.
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 107.05 would be a mildly bullish sign, but I also said that
I would avoid trading this currency pair for the time being because these two currencies are so highly correlated these days, moving together as relative safe havens.
This was a good call as the price broke up above 107.05 and is continuing to effectively hold up above that level.
However, it cannot be denied, that there is really little going on here, and there is not really any good reason to be looking to trade this currency pair.
The most interesting thing which might happen here in the near future would be a bearish break to new long-term lows below 106.00, which would be a very bearish sign.
There is nothing of high importance scheduled today regarding either the JPY or the USD.