Yesterday’s signals were not triggered as there was no bullish price action when any of the identified support levels were first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8 am New York time Wednesday and 5 pm Tokyo time Thursday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.20, 105.31, or 105.49.
- 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 104.87 or 104.37.
- 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 as there was still a weak long-term bearish trend in force which might reassert itself, so I remained interested in short trades from reversals at any key resistance level despite the short-term bullish trend.
This was a good call as we have seen the price fall quite strongly in recent hours to break down to reach the lowest price seen her in about a month.
So far, the support level at 104.87 is holding and this may produce a good long-term long trade entry if the price turns around – risky, but with a potentially high reward to risk ratio.
I think everything will now depend upon whether the price gets established below 104.87 (bearish sign) or whether the long-term range holds, and the price holds up from 104.87.
If the price does break lower, there could be another long-term long trade opportunity at 104.37 which is even more important than 104.87 as a boundary of the long-term price range.
There is nothing of high importance due today concerning either the USD or the JPY.