USD/JPY: USD is weak everywhere
Yesterday’s signals were not triggered, as there was no bullish price action when the support level at 107.29 was first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered 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 107.34, 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 106.80 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 this pair was in a very flat, stable consolidation pattern, which was currently holding between 107.29 and 107.63. I thought this was likely to continue over the day.
I was wrong, although not by much, as the U.S. Dollar weakened further and broke below the support at 107.29.
The real story here is a deterioration in the strength of the U.S. Dollar which has been felt even against a risk-off, safe-haven asset such as the Japanese Yen. These currencies have been moving together for a long time, which has made trading this pair very difficult, at least in the sense of it being hard to generate a lot of pips of profit.
I still would avoid trading this pair as the really important action in the Forex market has been in the other majors and I see no reason why this is likely to change any time soon.
Bears will need to push the price below the 106.00 handle before the action here becomes interesting. This will be more likely to happen the longer the price can remain below the new resistance level at 106.34.
There is nothing of high importance scheduled today regarding either the JPY or the USD.