Yesterday’s signals were not triggered, as there was no bullish price action at 111.21.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time Monday and 5pm Tokyo time Wednesday.
Short Trades
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.23 or 111.54.
- Put 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.88, 110.54, or 110.25.
- Put 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 despite the new lower resistance level, the picture still looked basically bullish as the price traded within a medium-term bullish price channel which is shown in the chart below. I would take a bullish bias if we get a retrace to 111.21 and a strong bullish bounce there. As New York opened, the price broke below that level, and there is now new resistance more or less confluent with it at 111.23. So we have a mixed picture – a medium-term bullish price channel and a short-term bearish trend within it. The confluence of the supportive trend line at 110.88 and the horizontal support level right now looks very attractive for a long trade entry, if the price gets there and there is a bullish bounce there today – I would take a bullish bias if that plays out.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CPI data at 12:30pm London time, and FOMC Meeting Minutes at 6pm.