USD/JPY: Long-term low prices rejected
Yesterday’s signals were not triggered as there was no bearish price action when the resistance levels at 106.72 and 107.02 were first 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 107.63 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 106.99, 106.72, 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 the resistance at 106.72 looked likely to be strong, so I would still be ready to take a short trade from a reversal there. I was also excited about a long trade from a bounce at 106.15.
The price rose strongly yesterday as risk-off sentiment returned to the market on growing fears of the impact of a coronavirus second wave on the economy of the U.S.A. Interestingly, this did not boost mainly the Yen as it tends to, but instead boosted the USD even here, quite heavily against the Yen.
We have a more bullish technical picture, after the price yesterday powered up and cut quite easily through resistance levels to end up back above the 107.00 handle.
The price looks likely to consolidate above 107.00 today but has room to rise to 107.63. Therefore, I am ready to take a cautious long trade from any firm bullish bounce that may happen at one of the support levels identified above.
There is nothing of high importance scheduled today regarding either the JPY or the USD.