Last Thursday’s signals were not triggered, as there was no bullish price action when the support level at 105.20 was reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8 am New York time Monday to 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 105.81, 106.07, or 106.50.
- 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 105.40, 105.26, 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 yesterday that the bullish consolidation pattern below 106.07 was continuing. I thought we might see a breakout after Friday’s release of key U.S. jobs data.
I thought that the best strategy was likely to remain looking for short-term trades from any reversals at the nearest levels such as 106.07 and 105.38.
This was enough to stay out of trouble. All that happened was the price dipped down strongly to the 105.00 area before grinding back up and printing a couple of new higher support levels.
We see a short-term bullish trend over recent hours as risk appetite continues to recover gently.
Interestingly, neither a disappointing U.S. jobs report nor news that President Trump has been admitted to hospital after contracting coronavirus has been enough to move the price significantly. It is hard to say this has much to do with the Yen or the Dollar as most other assets have moved little too.
Technically, the key feature is that the price just does not want to break up above the area of confluent resistance at about 106.00. The price has more or less held between 105.00 and 106.00 for almost two weeks, which is a relatively narrow consolidation.
If the price can get established above 106.07 that would be a bullish sign, so I will take a bullish bias if we get two consecutive hourly closes above that level after New York opens.
There is nothing of high importance scheduled today concerning the JPY. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3 pm London time.