Yesterday’s signals were not triggered as the bearish price action at the resistance of 112.09 was not strong enough. However, that level very effectively capped the high price of the day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.09 or 112.65.
Place 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 Trade
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.46.
Place 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 if the price could not get established above 112.10, I would be much less interested in being bullish, but if it did, we might see a strongly bullish move up to 112.65 or close to it, so I would become bullish in that event.
It was a good call to imply 112.10 as the likely pivotal point of the day, as the price failed to break that resistance again, on low volatility. There is residual bullishness, but it gets weaker and weaker the longer that 112.10 holds. If the price gets established below 111.46 that would be a bearish sign that this medium-term bullish move could be over. Alternatively, a real break above 112.10 should see the price continue upwards to 112.65 and I would be comfortable taking a bullish bias in this situation.
There is nothing of high importance due today concerning either the JPY or the USD.