USD/JPY: Pivotal point at 109.23
Yesterday’s signals gave a profitable short trade worth about 40 pips of profit following the bearish reversal from the resistance level I identified yesterday at 109.19.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 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 H1 time frame immediately upon the next touch of 108.67 or 108.21 or 107.08.
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 the price was showing signs of rejecting the close resistance level at 109.19 and making a bearish “V”. If this pattern and level held until the New York open and then starts to fall, I thought that would probably make a good short trade entry signal. This was a good call.
After moving down, the price bounced at the logical supportive inflection point at 108.67, but the price is not doing much now.
The USD is generally weak today, but the Japanese Yen seems to be even weaker. For these reasons, trading this pair today is probably not a good idea as it does not look likely to produce much directional movement. Trading either of these two currencies against commodity or European currencies will be more likely to produce better price movements, so I stand aside here today.
There is nothing of high importance scheduled for today concerning either the JPY or the USD.