USD/JPY Signal Update
Last Thursday’s signal was not triggered as although the price did reach 107.50, there was no sufficient bearish price action at that level.
Today’s USD/JPY Signal
Risk 0.75%
Enter only before 5pm New York time or from 8am Tokyo time to 8am London time (Tuesday).
Long Trade
Go long following bullish price action on the H1 time frame after a first dip into the zone between 107.50 and 107.38.
Place 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.
Take off 50% of the position as profit once the trade is 20 pips in profit and leave the remainder of the position to ride ensuring there is no risk left in the trade.
USD/JPY Analysis
I wrote last Thursday that if this pair was able to break above 107.50 then we should hit 108.60 quite quickly. We did in fact break 107.50 and the very next day reached a high of 108.34, so it cannot be said that we have been able to reach 108.60 yet.
It might be that we proceed upwards from here and it is hard to say how far we might go before a significant pull back. The level at 110.00 is still quite far away and that would be a logical area to take or protect some profit. My colleague Christopher Lewis expects 109.00 to put up a struggle.
Alternatively, we might pull back right away before bouncing bullishly. This looks to be the most tradable scenario, with the zone from 107.50 to 107.38 looking likely to be supportive. It is also confluent with a minor, bullish trend line, as shown in the chart below.
There are no high-impact data releases scheduled today concerning either the USD or the JPY. Therefore it is likely to be a quiet day for this pair.