Last Thursday's Signals were not triggered, as there was insufficiently bearish price action at any of the resistance levels which were reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time and 5pm Tokyo time, over the next 24-hour period only.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.85.
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.
Adjust 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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.09.
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.
Adjust 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
Despite the bullish breaks of key resistance levels and a reasonably strong upwards movement which climaxed after last Wednesday’s FOMC release, the pair was already starting to sell off and look unreliable, which is why I concluded my previous analysis by saying that I had no directional bias. This turned out to be a good call, as although the price went on to make another strong upwards push, this also failed at the nearest resistant area of 110.85, which has continued to hold. This puts a lot of doubt on the bull’s ability to truly get anywhere with the USD against the JPY. The Yen is one of the more relatively strong currencies over the long-term, and the USD is making much more headway elsewhere.
To conclude, it makes sense to see a slightly bullish bias here, but I would not be looking to trade this pair now until there is a decisive bullish breakout above 110.85. There is support below at 110.36 but I would prefer to look beyond that to 110.09.
There is nothing important due today concerning either the JPY or the USD.