Yesterday’s signals were not triggered, as there was no bearish price action at the 113.66 level.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered before 5pm Tokyo time, over the next 24-hour period only.
Short Trade
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 114.18.
- 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.
- Remove 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 touch of 113.66, 113.40 or 113.14.
- 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.
- Remove 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 a break above 113.80 or so would be a very bullish sign, but if the price traded below 113.40 for a couple of hours it would suggest a deeper pullback towards the lower end of the channel is becoming more likely. This was an OK if rather inconsequential call as the high was made a few hours ago at 113.90 only 10 pips above 113.80. We see in the chart below not exactly a bullish channel, but the medium and long-term pictures and certainly bullish, albeit weakly so. It now seems likely that 113.66 is going to be a pivotal level, and I would take a bullish bias on this currency pair if there is a healthy bullish bounce at that level later.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.