Yesterday’s signals were not triggered as the price action was not sufficient at either 112.65 or 112.19 to trigger an entry, but the resistance at 112.65 was perfectly identified and has produced a good move down.
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 112.10, 112.65, 112.88, or 113.02.
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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.43, 111.31, or 110.89.
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 it was looking more likely that we would have a double or even triple bottom at 112.19 which held. However, there was plenty of resistance below 113.02 so it is hard to see the price getting much higher. I thought a consolidation between 112.65 and 112.19 remains likely until the FOMC releases due later, which might push the price anywhere.
This was a good call, as the price remained within the range until the Asian session when it fell strongly down to new long-term low prices below 112.00 on above-average volatility. This is a bearish sign and as long as the new resistance levels hold, we can expect a further downwards move. I take a bearish bias today below 112.10.
There is nothing important due today concerning either the JPY or the USD.