Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.51, 108.73, or109.07.
- 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 Trade
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.50.
- 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 it would be crazy not to be bearish as the odds were still on the side of the bears, with the price continuing to make new long-term lower lows yesterday. However, volatility was below average which suggested the price may be due a retracement to 108.40 or the resistance level at 108.51. This was a good call as the price did rise slightly over the day and reached a price extremely close to 108.40.
The picture looks considerably less bearish now as the price does not seem to want to remain below 108.00 and look as if it is making a significant bottom. Stock market sentiment is also increasingly positive, and this tends to drive up the price of USD/JPY. However, despite this slight bullishness, there are strong resistance levels nearby which may hold down the price, so I would take a bearish bias at a strong bearish turn at any of the three nearby resistance levels which are shown in the price chart below.
There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.