Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trade
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.10.
- 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 111.87, 111.58, or 111.23.
- 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
Last Thursday I wrote that this pair was looking more bullish as it tested strong long-term resistance at 112.10. The price had sold off from there, signifying that we might be printing a bearish double top there, but if the price got established above it and reached new multi-month highs, then that would be a very bullish sign and I would take a bullish bias.
It was a good call to see this area as very pivotal, as it has continued to hold and has become a very major line in the sand. There is also selling from the round number at 112.00. I feel even more strongly now that a sustained break above 112.10 would be a very important and significant bullish sign, and I would gladly take a bullish bias above there if such a break happens on above-average volatility.
On the short side, I don’t have much confidence, as there are several support levels close below, which would surely take quite a while to be broken down.
There is nothing important due today concerning either the JPY or the USD.