USD/JPY: No long-term trend
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level at 106.22 was first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Tuesday and 5pm 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 106.43, 106.62, or 106.79.
- 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 106.22, 105.88, or 105.50.
- 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 the price was consolidating within a short-term narrowing triangle formation above 105.50. However, I was anticipating a bearish breakdown followed by a recovery from the 105.00 area, instead of the bullish breakout we have seen happen over the past 24 hours. Still, I was correct to note the triangle.
There is short-term bullish momentum which may persist. There is no real trend except on a short time frame.
Despite the bullish momentum, I am prepared to take a short trade from a bearish reversal which might happen later at 106.43 as this has acted as a pivotal point for some time.
If the price can get established above 106.43, that would be a bullish sign, and suggest a further rise is more likely than not.
A problem in trading this pair is that there are a lot of key levels close by, so action is probably going to be choppy and mostly difficult and unrewarding to trade.
There is nothing of high importance due today regarding either the JPY or the USD.