USD/JPY: Support at 105.28 looks strong
Yesterday’s Signals gave a losing long trade from the small bounce at 105.97. However, I did suggest the price was likely to fall quickly to that area after breaking below 106.43 which was a good short call.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered 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 105.73, 105.97, or 106.43.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.28 or 104.87.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
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 although this pair’s low volatility and ranging behavior made it most suitable for scalpers, the short-term price action suggested that the support level at 106.43 was very strong, but if the price broke it, it might fall quite quickly to the 106.00 area.
This was a good call as that level at 106.43 was very pivotal, producing a surprisingly strong downwards move once it broke down.
We now see the price not far from what looks likely to be strong support at 105.28. I think the bullish turn here will be likely to hold for at least a day or two, and we are quite likely to see a bullish movement now up to at least 106.20, so there is some potential for a long trade here.
These are long-term low prices below the big round number at 105.00, so this area really is quite likely to give some long pips.
If the price does fall strongly again and get established below 104.86, that will be a very bearish sign and suggest a further fall down to the 102.50 or 100.00 area would be likely.
There is nothing of high importance due today regarding either the JPY or the USD.