Yesterday’s signals produced a losing short trade at the bearish rejection of the resistance level identified at 111.74.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time until 5pm Tokyo time, during the next 24-hour period only.
Short Trade 1
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.95.
- 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 ride.
Long Trades
- Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.74 or 111.47.
- 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 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
Yesterday I mentioned that we could be seeing the formation of a bullish “Quasimodo” pattern which would drive the price up again over the short-term. This is what happened, with the price breaking up into the cluster of resistance levels, and only ultimately being held by the final one, at 111.95. The long-term bearish trend is over and a break up above 111.95 would be significantly bullish. I think a long trade from nearby support has better odds of turning profitable than a short trade off another rejection of 111.95.
There is nothing due concerning the JPY. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time, followed by the FOMC Meeting Minutes at 7pm.