USD/JPY: Long-term resistance 110.07/30
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am and 5pm Tokyo time Tuesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.95, 110.12, or 110.69.
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 109.54, 109.25, or 108.99.
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 the technical picture was essentially unchanged: we still saw the price trying and failing to really breakout bullishly above this 110.00 area, and the longer this indecisive situation persists, the more likely we were to see either an explosive bullish breakout above the highs at 110.30 or so, or a strong bearish failure.
This was enough to keep out of trouble so wasn’t a bad call. None of the key levels were reached, we just continue with a consolidation on low volatility.
There is no reason I can see to change my approach: there is a long-term bullish trend here, and a strong bullish breakout to new long-term highs could be a very interesting long trade to be involved in. We may also see a strong failure here, as this area around 110.00 is likely to remain pivotal.
New York is closed today so trading will be light until Tokyo comes online. I would wait for tomorrow before taking any new trades in this currency pair.
There is nothing of high importance due today regarding either the JPY or the USD. It is a public holiday today in the U.S.A.