USDJPY: Looking more bearish as 108.56 holds
Yesterday’s signals were not triggered, as none of the key levels were ever reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trades
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.65, 108.75, or 109.07.
Place 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 Trade
Go long 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.
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 the pivotal point of yesterday was 108.75 and the price has moved down quite firmly ever since that bearish rejection there happened. The price had even broken below the (very weak) support level I had identified at 108.32. These were all bearish signs, but due to the bottoming out around 108.00 I was not ready to take a real bearish bias until the price made new lows below 107.80.
This was a reasonably good call and probably still holds true now, even though the picture has become a little more bearish still due to the new lower resistance level forming at 108.56. There is support at 108.22 and if this breaks down, then the picture will become much more bearish due to the long-term bearish trend and the fact that the price is close to multi-week lows not far below 108.00.
I would take a bearish bias later if the price can get established below 108.22 after New York opens later today.
There is nothing important due today concerning either the JPY or the USD.