Last Thursday’s signals produced a small short trade which barely made the minimum 20 pips of profit after the inside candlestick rejected the resistance level at 110.88. The price was eventually able to break above that resistance.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.31 or 111.63.
- 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 Trades
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.88, 110.54, or 110.25.
- 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 last Thursday that the best analysis I could give was that if the price could get established above 110.88, that would be a bullish sign. Yet it really seemed that the price is just going to continue with more of the same low-volatility, meandering action, so again, there would probably be better opportunities elsewhere.
My analysis was correct, although I was pessimistic that it would become useful, but the action picked up a little with the price breaking up to trade in line with a symmetrical bullish price channel. Recent hours have seen the top of this channel broken, so despite the lack of a long-term trend, the picture is definitely looking more bullish. The support levels are obvious and have probably flipped from resistance, so any firm bullish bounces at any of the levels below should be good for at least a few long pips. However, we are still some way off a truly significant bullish move.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Retail Sales data at 12:30pm London time followed by ISM Manufacturing PMI at 2pm.