USDJPY: Bullish breakout above upwards price channel
Yesterday’s signals were not triggered, as there was no bearish price action at 110.29.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be opened between 8am New York time Wednesday and 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 110.88.
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 110.29 or 109.81.
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 we could now draw a convincing bullish price channel to cover the past week or so. However, we had a double top at 110.29 as well, which was a bearish sign. If the price could get established above that level, it would be a bullish sign, but the odds of a break below 109.81 are only slightly less.
This was a good call, but I should have been more optimistic. The bulls pushed the price past the resistance at 110.29 which has probably now become new higher support. The price chart below shows a technical breakout above the upper trend line of the initial price channel, with the price now supported by a new steeper bullish trend line.
There is no long-term trend, but the price is certainly in a medium-term bullish trend. Bulls can be excited by the bullish V-shaped reversal which has just printed over the past week or so with a bottom just above 109.00. However, the price is still within an area of relative range, so the bullish move may not have much further to run.
Much of the future of this pair over the near term is likely to depend upon whether there is a resolution of the trade dispute between the U.S.A. and China.
Today, I would take a bullish bias if the price makes a firm bullish reversal after retracing back to the support level at 110.29.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of the FOMC Meeting Minutes at 7pm London time.