Yesterday’s signals were not triggered as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time and 5pm Tokyo time, during the next 24-hour period only.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.72 or 111.47.
- 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.
- Remove 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 1
- Long entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.63.
- 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.
- Remove 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
This pair is in an interesting situation and should be attractive to traders. The price has again reached and rejected the bearish trend line shown in the chart below. This line is the upper boundary of a long-term and very wide bearish price channel, and therefore logically there is a good possibility that the price has much further to fall. Strengthening the bearish case, we also have a retest and rejection of a broken short-term bullish trend line. The difficulty for bears is that not only has the U.S. Dollar been strengthened by yesterday’s rate hike by the Federal Reserve, it is also being bought strongly every time there is a significant fall, which makes trading the pair short a painful process over the long-term, so something very stressful over the short-term.
Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time. Concerning the JPY, during the Tokyo session the Bank of Japan will release its Monetary Policy Statement and Policy Rate, followed by the usual Press Conference at 7:30am.