Yesterday’s signals were not triggered, as there was no bullish price action at the 113.66 or 113.40 levels.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken until 5pm Tokyo time, during 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 113.42 or 113.69.
- 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 113.14 or 112.75.
- 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 yesterday that it seemed likely that 113.66 was going to be a pivotal level, and I would take a bullish bias on this currency pair if there was a healthy bullish bounce at that level later. There was no such bounce, but it did act as a pivotal level, although not precisely.
The Dollar looks more bearish everywhere after the Chair of the Fed yesterday hinted that the pace of any further rate hikes would slow significantly. However, the Dollar is more bullish here against the Yen than it is against most other major currencies, with the medium-term bullish trend line clearly holding up at 113.14 where it is confluent with a horizontal resistance level. Although there is some short-term bearish momentum, we should look to see what happens when 113.14 is reached. A bullish bounce there could be the start of a bullish move, but if sentiment now becomes more consistently bearish on the Dollar and the price breaks down below the channel, we could then see a more decisive bearish movement.
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.