USD/JPY: Yen and Dollar moving in tandem
Yesterday’s signals were not triggered, as there was no bearish price action when the price first reached the resistance level identified at 107.10.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8 am New York time Tuesday and 5 pm 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 107.42, 107.76, or 107.87.
- 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 107.10 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 did not see any good opportunities in this currency pair except for a long close to 106.00 or a short from 107.76.
I was correct to be skeptical of the recent bearish movement, as we saw bulls push the price back up above the 107.10 level, where it now consolidates within a relatively narrow range.
This pair looks unlikely to move much and is one of the more flat, low-volatility currency pairs right now. However, that may change later when the Bank of Japan releases its monthly policy guidance. Any surprises there could see the price spike to levels that have not been seen for a while.
I am prepared to trade a reversal of any spike after the Bank of Japan’s release to either 106.42, 106.15, or 108.23.
Concerning the JPY, the Bank of Japan will be releasing its Monetary Policy Statement and Outlook Report late in the Asian session. There is nothing of high importance scheduled today regarding the USD.