USD/JPY Signal Update
Yesterday’s signal was not triggered and expired.
Today’s USD/JPY Signal
Risk 0.75%.
Entry may only be made before 5pm London time today.
Long Trade
Enter long following a next bar break of any bullish pin or engulfing hourly candle forming after the first touch of 100.88. Once two hours have elapsed following the close of the first hourly candle that closes below 100.88, the trade should not be taken.
Put a stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit or at 4:30am tomorrow morning London time if the trade is in profit at all. Take off 75% of the position as profit here, and leave the remainder to ride.
USD/JPY Analysis
Following last week’s bearish turn, we saw a pull-back yesterday upwards with a slight breaching of Friday’s high, before things turned decidedly bearish during last night’s Asian session. The price looks now to be heading down towards the double bottom that has already been formed over previous days on the 50% Fibonacci retracement at around 101.20. It would be surprising if we are able to break below that before the US news due later today, and it might be that the words of the Governor of the Bank of Japan tomorrow morning will be needed in order to break this low.
Things look bearish on all time frames but the support at 101.20 will be the key. There is a good supportive level below that at 100.88 which is quite confluent with today’s S3 GMT daily pivot point. I will wait until the price gets down there before looking for a long trade. Above us there are no good resistant levels before 102.80 although it is too far away to be of concern today. A little below that there is a 2-month bearish trend line which currently sits at 102.50.
Today there are important economic data releases for the USD, although nothing for the JPY, so this pair should be busier than it was yesterday. At 12:30pm London time there will be data from the U.S.A. as the Building Permits and Core CPI numbers are released. Tomorrow morning at 5am the Governor of the Bank of Japan will be speaking, so there should be two spikes of activity in this pair over the next 24 hours.