Last Thursday’s signals were not triggered as the bearish rejection of the resistance level identified at 105.30 did not take place until after the end of the Tokyo session.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8 am New York time Monday until 5 pm Tokyo time Tuesday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.52, 105.81, or 106.08.
- 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 105.31, 105.20, 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 last Thursday that the technical situation was beginning to show signs of changing in a more bearish direction, with the new lower resistance at 105.30 looking pivotal. I was looking for a short trade from a reversal there or a long trade from a reversal at 104.87.
The resistance level at 105.30 did hold the price down for a while but ultimately failed to hold.
There is a long-term bearish trend here in this currency pair, but it is extremely slow.
The price is just continuing to consolidate and printing support and resistance levels which get narrower and more congested, making this currency pair unattractive to trade.
As long as the resistance level at 105.52 continues to hold it will remain pivotal, and I am still prepared to take swing trades short from that level or from any of the higher resistance levels I have identified above it.
A long-term long trade may be attractive at 104.87 if it also quickly rejects that big round number at 105.00.
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 1 pm London time.