USD/JPY: More bearish on souring risk sentiment
Yesterday’s signals were not triggered as unfortunately the bearish price action took place just a little way above the resistance level identified at 108.59.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.62, 109.19, or 109.59.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.02.
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 would stand aside and wait to see what happens for the time being unless there was an exceptionally attractive bearish price action rejection of 108.59 at about the time markets in New York opened. This was a great call as although the scenario did not set up precisely, the price did fall firmly from the area near 108.59 as New York opened.
The price has reached quite close to the key support level confluent with the round number at 107.00 where it has been consolidating for a while.
There is no long-term trend, although there is a medium-term bearish trend.
This pair often is affected by the U.S. stock market, which is showing signs of being about to begin a bearish move down. If so, this would be likely to see the Japanese Yen strengthen somewhat, although this is far from certain. In any case, a break below 107.00 would have enough room to fall all the way down to 105.21, so the price has room to fall. For these reasons, I will take a bearish bias later today if we get two consecutive hourly closes below 107.00 after New York opens.
There is nothing of high importance scheduled for today concerning the JPY. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change data at 1:15pm London time, followed by ISM Manufacturing PMI numbers at 3pm.