Yesterday’s signals were not triggered, as none of the key levels were ever reached.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken between 8am New York time Thursday to 5pm Tokyo time Friday.

Short Trade

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.46.

  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.76 or 110.27.

  • 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 although there was a clear bullish medium-term trend here which was partially driven by the positive correlation this pair often shows with a rising U.S. stock market, the volatility of the current movement was relatively low, which implied unreliability. I still had a cautiously bullish bias if the price could make new highs in the early part of the New York session. This was a good call, as the price did make such a new high, and continued to rise, but the rise has been weak and now seems to have stalled. A pullback to at least 110.76 now looks likely, but a strong bounce there could well produce a nice if perhaps small profitable long trade, so I would take a bullish bias if that scenario plays out.

USDJPY

There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be releases of Retail Sales and PPI data at 1:30pm London time.

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