USD/JPY: Yet bulls face obstacles below 106.41
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at 105.78 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.21 (if it holds until the New York open), 106.41, or 107.07.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.02 or 105.78.
- 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 much trading opportunity here, except for a possible short trade from the nearby resistance level at 105.78. This did not set up.
The price action looks a little more predictable today with key levels remaining clear.
The action has been weakly bullish.
Bulls are now facing a key test with the trend line shown in the price chart below confluent with formerly pivotal resistance at 106.41, so I see this as the key level to watch today.
If we get two consecutive hourly closes above 106.41, I will take a bullish bias as there is plenty of room for the price to rise.
If we get a bearish failure at 106.41 near the New York open, I will take a bearish bias from there.
Concerning the USD, there will be a release of the ADP Non-Farm Employment Change Forecast at 1:15pm London time. There is nothing of high importance due today regarding the JPY.