Yesterday’s signals produced a profitable long trade from the bullish rejection of the support level at 113.41. It should have been closed out in profit at the bearish turn around 114.00 which took place some hours later.
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
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 114.07 or 114.50.
Put the stop loss 1 pip above the local swing high.
Move 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 Trade 1
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 113.29.
Put the stop loss 1 pip below the local swing low.
Move 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
This pair continues to look interesting. There is a long-term bullish trend, but the price is now beginning to break below the medium-term bullish channel, with the broken supportive trend line shown in the chart below. The price has not been able to break up above the very long-term resistance at about 114.50, and has printed a new, lower resistance level at 114.07, which is a bearish sign. I wrote earlier this week that the longer the price took to make an upwards break, the more likely it would become that the price would move down instead, and this scenario is looking more likely still. The support levels at 113.75 and below are being slowly eroded, yesterday saw a nice, tradable bullish bounce off 113.41, and as 113.29 has not been touched yet, that could be interesting for a further bullish move. If the price gets below 113.29 for any meaningful length of time, it could fall sharply as bulls’ stop loss orders are uncovered.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.