USD/JPY: Support at 105.87 likely today’s pivotal point
Yesterday’s signals were not triggered, as the bullish price action took place just slightly below the support level identified at 105.88.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8 am New York time Thursday to 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 106.22, 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 105.87 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 we were seeing a bullish price channel begin to emerge. I saw the potential opportunity which really stood out in yesterday’s price chart as a long trade from 105.88 which had a horizontal level confluent with a supportive trend line.
This was not a bad call as although the level did not hold precisely, the area has held up so far.
The price channel can now be readjusted to be fully symmetrical which is a sign that it has become a more significant and reliable technical feature.
The support level has been adjusted down very slightly to 105.87. This looks very likely to be a very pivotal point.
I will be very happy to take a long trade from a bullish bounce at 105.87 if it sets up later. A sustained break below that level will be a bearish sign, but I see the odds overall as better on the bullish side in this currency pair today.
There is nothing of high importance due today regarding the JPY. Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 2:10 pm London time, as the Jackson Hole Symposium gets underway.