Yesterday’s signals were not triggered, as none of the key price levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time and 5pm Tokyo time, over the next 24-hour period.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.33 or 112.21.
Place 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 run.
Long Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.85.
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.
Remove 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
The technical situation remains clearly bearish. The chart below shows that the price continues to move down within a clear and symmetrical bearish channel, although at a slower pace. The second nearest horizontal resistance level is above the channel, which would mean a break had happened if it is reached, but I would not worry overly about that. The closest key resistance level is at 111.33 and this is becoming confluent with the upper channel trend line so is starting to look like a good opportunity. However, the price has been very close to the level for a while, so before taking this, be sure the price hasn’t touched or come very close to the level for a few hours, and that any bearish rejection looks strong.
As there are no key support levels before 109.85, there is certainly room for the price to fall further.
There is no long-term trend, but the momentum is clearly with the bears, so I maintain my bearish bias. This pair has become more interesting as average volatility has grown in recent days, and the pair is close to taking over from GBP/USD as the most volatile major currency pair.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time, while the new designated Chair of the Federal Reserve will be testifying before Congress at the same time. The U.S. Treasury Secretary will be giving a minor presentation at 8:45pm.