Last Wednesday’s signals may have produced a long trade entry after the bullish break of the very large engulfing candle after the FOMC release. This would still be open, although at a small loss, but should be worth holding onto.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time and 5pm Tokyo time, during the next 24-hour period.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.85.
- 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 bullish price action reversal on the H1 time frame immediately upon the next touch of 111.25.
- 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 has been coming back to the centre of the market over recent days, touching the psychologically key 112.50 level and threatening to start a new bullish trend which would become established technically above that price area, which has acted as both support and resistance over recent months. The flow is still bullish, but at the time of writing the price is sitting right on the support level at 112.17 and it does not look as if it is going to hold, so we may be due a deeper pull back. I maintain a bullish bias on this pair but any time Korean tensions flare up it tends to strengthen the Yen, making long positioning a little problematic.
There is nothing important due today concerning either the JPY or the USD.