Yesterday’s signals produced a losing trade following the bearish pin candlestick which rejected the resistance level at 111.44 on the hourly chart. Unfortunately, it only gave about 10 pips of profit before turning around and getting stopped out.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.63 or 112.10.

  • Place the stop loss 1 pip above the local swing high.

  • Move the stop loss to break even once the trade is 20 pips in profit.

  • 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 Trade

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.45, 111.31 or 110.60.

  • Place the stop loss 1 pip below the local swing low.

  • Move the stop loss to break even once the trade is 20 pips in profit.

  • 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 yesterday that the picture had become more bearish as the Dollar was weak everywhere and we had printed new resistance levels at both 111.44 and 111.31. I took a cautiously bearish bias below 111.31. The last sentence was a good call as the price was above the 111.31 level as New York came online and there wasn’t another hourly close below it, so it was the true pivotal level of the day.

The price is now respecting levels but consolidating within a medium-term narrowing triangle which can be seen in the price chart below. We will probably get some more direction and possibly a decisive breakout after the FOMC release due later. Until then, the price is likely to continue to range between levels.

USDJPY

Regarding the USD, there will be releases of the FOMC Statement, Economic Projections, and Federal Funds Rate at 6pm London time, followed by the usual press conference half an hour later.

Concerning the JPY, there is nothing due as it is a public holiday in Japan.

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