USD/JPY: Yen not highly preferred to Dollar as Safe Haven
Yesterday’s signals were not triggered as there was no bullish price action when the support level identified at 106.02 was first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8 am New York time Wednesday until 5 pm Tokyo time Thursday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.08, 106.50, 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 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 we were seeing an extremely flat consolidation on low volatility with a total absence of trend on any time frame.
I was prepared to take a very cautious long from 106.02 or 106.50 but this did not set up.
I also saw a chance for a directional move to emerge from the extreme flatness, and we did get a bit of a move down as we saw global stock markets sell-off yesterday and money flow into safe havens. This would tend to benefit the Japanese Yen, but the Yen right now is not much more attractive than the U.S. Dollar as a safe haven, so even with stocks being sold, we don’t see much of a move down here.
This pair does not look attractive to trade, with low volatility and the absence of any firm directional movement.
If you are determined to trade this currency pair, scalps from bounces off key levels with close monitoring for exits is probably going to be the best approach.
I take no directional bias today.
There is nothing of high importance due today regarding either the JPY or the USD.