Last Thursday’s signals were not triggered, as there was no bearish price action at 112.36 that day.
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
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.35 or 112.83.
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 run.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.43 or 111.31.
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 run.
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 last Thursday that I thought that as the stock market still looked very vulnerable, now reaching its price from six months ago and heading lower, we were more likely to see sudden flows into the Japanese Yen, which would make taking any long trades in this pair very dangerous. I would only want to take short trades here from bearish reversals at key resistance levels. I would take a bearish bias if we got a stronger bearish reversal later at 112.36.
I was right to be careful about wanting a strong reversal at 112.36 as the level eventually broke up, but the best trade was a short from a new bearish trend line a few hours later. I was also correct to see long trades as dangerous as the Yen would benefit from further stock market sell-offs, which also happened.
The price is moving up now as stock markets are recovering somewhat, but my basic analysis holds – markets are looking bearish and it will remain dangerous to trade against the Yen while this persists. This pair is quite trendless and is tending to move backwards and forwards which can make trading it difficult. I have no directional bias.
There is nothing important due today concerning either the JPY or the USD.