Yesterday’s signals were not triggered, as there was no bearish price action at 106.13.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8am New York time until 5pm Tokyo time, over the next 24-hour period.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.00.
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.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.44, 106.13, or 105.66.
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.
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
Yesterday I took a bullish bias above the level at 106.13. This worked out well as the price quickly broke cleanly through that level, and then continued to advance. Recent hours have seen new, higher support formed at 106.44 after a short pull-back, and the price is continuing to advance as at the time of writing. There is a clearer short-term trend here in favour of the U.S. Dollar than in the other major currency pair, so I maintain my bullish bias above 106.44. However, the price is now starting to approach an area of likely resistance around the round number at 107.00, which is confluent with a major recent swing high and long-term bearish trend lines. This means a bearish reversal in that area is quite probable, but if the price gets established above 107.00 it would be a very bullish sign, suggesting a greater likelihood that the long-term bearish trend has ended.
There is nothing due today concerning the JPY. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time, followed by ISM Non-Manufacturing PMI at 3pm and Crude Oil Inventories at 3:30pm.