USDJPY: Bulls pushing and testing 108.16
Yesterday’s signals were not triggered, as there was no bearish price action at 107.90.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.16 or 108.75.
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 Trades
Long entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.90 or 107.36.
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 we were seeing a more bullish picture in this currency pair, despite the long-term bearish trend. It may take a while, but the price looked likely to reach 107.90, where it might then make a bearish reversal. This could be a good short trade if the bearish rejection was strong and I would take a bearish bias later if we get this trade set-up here.
This was enough to stay out of trouble and I was correct to identify 107.90 as a key level, however it now looks as if 108.16 is going to be more significant as it just held very cleanly and obviously as resistance over the past few hours. There is a long-term bearish trend, but the bulls are still in the driving seat above 107.90. If the price can get established above 108.16 that would be a significant sign of increasing bullishness, while a sustained break below 107.90 (107.50 would be even better) should indicate bears are in charge and the price is action realigned with the long-term bearish trend.
There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of Final GDP data at 1:30pm London time.