Last Thursday’s signals were not triggered, as the bearish price action took place above 112.41.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time to 5pm Tokyo time, over the next 24-hour period.
Short Trades
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Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.50 or 112.83.
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Put the stop loss 1 pip above the local swing high.
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Move the stop loss to break even once the trade is 20 pips in profit.
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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 Trades
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Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.66, 111.43, 111.31, or 110.89.
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Put the stop loss 1 pip below the local swing low.
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Move the stop loss to break even once the trade is 20 pips in profit.
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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 last Thursday that if the price broke above 112.50 soon it would be a bullish sign, while another failure in this area will suggest that a move down to 111.66 at least will be likely. This was a great call although I had the resistance level slightly below 112.50 at 112.41. Still, the failure at 112.50 has indeed produced a further move down to 111.66.
The Yen benefits from nervousness over stock markets, with the U.S. S&P 500 Index threatening to turn bearish as it cons9olidates just below its 200-day moving average. I expect that the USD/JPY will continue as a proxy for the U.S. stock market, and if stocks sell off strongly later then we can expect this pair to fall further. However, bears should note the cluster of support plus the bottom of the price channel shown in the chart below from about 111.43.There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time.
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