Today’s USD/JPY Signals
Risk 0.75%.
Trades may be taken from 8am New York time Thursday until 5pm Tokyo time Thursday.
Short Trade
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.10.
- 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 111.58, or 111.23.
- 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
This pair is looking more bullish as it tests strong long-term resistance at 112.10. The price has sold off from there, signifying that we might be printing a bearish double top there, but if the price gets established above it and reaches new multi-month highs, then that will be a very bullish sign and I would take a bullish bias. With this pair, above-average volatility is a very good indicator of momentum, so I want to see such a bullish break with strong momentum.
The alternative scenario is that the double top at 112.10 was the beginning of a further downwards movement. There may be new support forming now at 111.80 so if that breaks down it would suggest the price will reach 111.58. Bears should not be confident until the supportive trend line shown within the price chart below breaks down.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time.