Yesterday’s signals were not triggered, as the bullish price action at 110.40 was weak and the price missed hitting the resistance level at 110.86.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8am New York time until 5pm Tokyo time, during the next 24-hour period.
Short Trade
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Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.36, 110.56, or 110.86.
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Place the stop loss 1 pip above the local swing high.
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Adjust the stop loss to break even once the trade is 20 pips in profit.
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Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Long Trades
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Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.85 or 109.60.
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Place the stop loss 1 pip below the local swing low.
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Adjust the stop loss to break even once the trade is 20 pips in profit.
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Remove 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
For several days I have been saying this pair is weakly bullish, but really needed to break up above a cluster of resistance levels above 110.00, with the highest of the levels of 110.86, before we could be reasonably confident about a take-off. I thought yesterday’s FOMC release was likely to be decisive as to whether the level would hold or break, and it seems I was right, with the price getting to within 1 pip of that level before selling off firmly and re-establishing the broken resistance levels.
The outlook now is therefore much less directionally decisive. The price is slowly descending but I have no faith in it reaching anywhere or bouncing somewhere in particular. Generally, the action is better in the European currency pairs such as EUR/USD right now. I have no directional bias today, nothing that there will be major data releases over the next 24 hours for both currencies, with the Bank of Japan’s input likely to be particularly influential and able to push the price anywhere.
Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time. Concerning the JPY, there will be a release of the Bank of Japan’s Monetary Policy Statement followed by the usual press conference, late in the Asian session.
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