USDJPY: Pivotal area 109.50 / 110.00 still in play
Yesterday’s signals were not triggered, as there was no bearish price action when 109.52 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.96.
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.
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 Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.52 or 108.96.
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 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 I although the price area between 109.50 and 110.00 has been extremely pivotal for a while, I would avoid trading this pair unless we saw a strong bullish move with a New York close above 109.70, which will cause me to take a bullish bias if it happens.
This was a good call as the price has continued to trade near the lower boundary of this pivotal area on very low volatility, without really going anywhere, so waiting for the price to clear 109.70 before taking a bullish bias was enough to stay out of trouble.
There is no real change to the technical situation – we are likely to soon either see a strong bullish move to new long-term high prices, or a meaningful downwards move. Much is likely to depend upon whether the next major news concerning the U.S. economy is positive or negative. A confirmation of more elements of a U.S. / China trade deal would probably be enough to make the bullish breakout happen.
It is worth keeping a close eye on this currency pair. The Bank of Japan’s monthly release a few hours ago did almost nothing to the Yen, and the House of Representative’s vote to impeach President Trump is also having little impact upon U.S. markets as there is currently no real prospect that the Senate will convict him and remove him from office.
I would again be ready to take a bullish bias if the price can get established above 109.70.
There is nothing of high importance due today regarding either the JPY or the USD.