Yesterday’s signals were not triggered, as neither of the key levels were ever reached.
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 Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.85.
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 Trades
Go long following a bullish price action reversal on the H1 time frame immediately upon the next entry into the zone between 109.09 and the broken bearish trend line shown in the price chart below, which is currently sitting at about 108.90.
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 price reaches 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 if the price does not move down to break the lows soon, it will become more likely to make a more decisive bullish reversal, with no obvious obstacle beyond 109.00 to stop its rise all the way to 109.50 or even higher. This is how the moves have played out, with the price breaking up out of its triangle and beyond the bearish trend line and 109.00. The area close to 109.00 has been turned into new support and as I write the price is threatening to hit 109.50. The short-term signs are all bullish, despite the long-term bearish trend. There may be an opportunity later for a long entry if the price pulls back to the supportive area starting at 109.09, or possible a short if a rejection of 110.00 and 109.85 happens at the same time. However, it feels like long trades are going to perform better today.
There is nothing important due today regarding the JPY. Concerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.