USD/JPY: Consolidating Between 108.62 and 109.19
Yesterday’s signals were not triggered, as the bullish price action at 108.61 was too slow to give a long trade entry signal.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 109.23 or 109.59 or 110.08.
- Put 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 ride.
Long Trade Ideas
- Long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 108.61 or 108.21 or 107.80.
- Put 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 ride.
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 expected that the price of this currency pair would continue to consolidate between 108.61 and 109.23 over the next 24 hours, so I would be prepared to trade reversals from either level with no overall long or short bias. This was a great call as it perfectly forecasted what happened in this pair over the past day.
There is no reason to change this approach, as I think this consolidation pattern will continue even though we will be getting some U.S. employment data later. I think that this consolidation is more likely to break tomorrow than today.
As I think this dominant consolidation pattern will hold, I would again look for reversals off either key level without any directional bias. Using shorter time frames for entries and exits will probably be the best approach as movement is likely to be light with the USD and JPY showing a strong positive correlation in their relative values these days.
Regarding the USD, there will be a release of Unemployment Claims at 1:30pm London time. There is nothing of high importance due today concerning the JPY.