Yesterday’s signals were not triggered. Unfortunately, the bullish price action took place a little way below the support level identified at 111.39.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time and 5pm Tokyo time over the next 24 hours.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.40 or 112.93.
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
Go long following a very strong bullish price action reversal on the H1 time frame immediately upon the next touch of 111.34.
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
I wrote yesterday that the pair had some short-term bearish momentum, as at the time of writing, so it would be best to be extremely careful about taking any long trades. If the price broke below 111.39, there could be a much sharper fall all the way down to 110.00. The pair did fall further, by approximately another 60 pips, but then went on to bottom out just a few pips below 111.39, so the key support seems to have held. Ranging conditions have been dominant in this pair for a long time, and despite the strong move, look like continuing to prevail. The next thing to watch out for is how much further the price can rise, and how quickly. If the price could get established above 112.50 in the next few days, that would be a very bullish sign. I have no directional bias on this pair.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of PPI data at 1:30pm London time.