Last Thursday’s signals were not triggered, as neither of the key levels were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time and 5pm Tokyo time today.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.07 or 110.04.
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 Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.05
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 last Thursday that I would be bearish below 110.68 and very bearish below 110.00, but I wanted to see the price remain below either level for a couple of hours at least first. Volatility was quite high, so I thought that we were likely to see plenty of movement. I was correct, but the initial break below 110.68 took several hours to really produce a strong move.
The price has continued to fall strongly as money flows into the Japanese Yen as the leading “safe-haven” currency in a very risk-off market environment, especially as U.S. stocks sell off. The price may have bottomed, but it has just broken a support level at 109.07 which may now have become resistance, so a further fall is quite possible. If the price can get above 109.07 and stay there for a couple of hours, this will be a sign of at least a temporary halt in the bearish movement. Alternatively, if the price cannot get above that level over the next several hours, we are likely to see the price begin to fall again towards the next support level at 108.05. I take a bearish bias below 109.07.
There is nothing of high importance due today concerning either the JPY or the USD.