Last Thursday’s signals were not triggered, as the high of the day was unfortunately just 3 pips or so below the resistance level identified at 108.55.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time and 5pm Tokyo time today.
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 108.55, 109.08, or 109.50.
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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 ride.
Long Trade
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Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.02.
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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 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 it looked as if this pair was not really the focus of the market right now, and short-term volatility was relatively low. I thought it was quite likely that the price would range broadly under the 109.50 area for the next few days, with uncertain direction. Despite that, I was ready to take a bearish bias if we got a strong bearish rejection at 108.55.
This was a good and accurate call. The resistance level at 108.55 has held and the picture is now looking more bearish as risk-off sentiment returns to the market, sending money flowing into the Yen. Therefore, I would take a bearish bias if the price can cleanly break below 107.80 later today.
There is nothing of high importance due today concerning either the JPY or the USD.
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