USD/JPY Signal Update
Last Thursday’s short signal was triggered and produced a perfect, beautiful winning trade. A strong pin bar formed on the H1 that just kissed and rejected 102.80, a level that was clearly flipping from support to resistance. There were two factors of confluence within the H1 bearish pin bar: its wick was rejecting both that long-term bearish trend line that had begun to act as resistance after previously providing support, and the 200 EMA. The remainder of the open position on this trade should be closed immediately at the market price for an approximate total gain of 1.5 units of risk.
Today’s USD/JPY Signal
Risk 0.50%.
Any entry has to be taken between 8am and 5pm London time today.
Long Trade
Enter long following a next bar break of any bullish pin or engulfing hourly candle forming after the first touch of 100.88. From two hours following the close of the first hourly candle that closes below 100.88, this trade is invalidated.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even when the price reaches 101.23. Remove 75% of the position as profit at this point, and leave the remaining 25% to run.
USD/JPY Analysis
The bearish trend line that was broken to the upside earlier last week began to act as resistance on Thursday, forcing a very sharp move down all the way forming a double bottom on Friday at the Fibonacci retracement level of 50% of the recent major move up. From there, we have had a bounce up about 40 pips this morning. There is no obvious resistance level above us before the previous level of 102.80 so it is hard to tell where this move up will end.
Below us there is major support at 100.80, if the fall continues then I would be looking for a long trade at this level were it to be confirmed by price action. However looking at the chart, it seems we have formed a double bottom which itself is a higher low than the previous major low, so it seems likely we are going to have some kind of bullish pull back before we might reach 100.80.
Today there are no scheduled high-impact data releases relevant to either the EUR or the USD, so it is likely to be a quiet day.