USDJPY: Price cannot get above 106.73
Yesterday’s signals were not triggered as the bullish price action took place slightly below 106.47.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.73, 107.21, or 107.26.
- 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.
- 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.69.
- 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.
- 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 the resistant area close to 106.73 and the long-term bearish trend line shown in the chart below were still holding. I was ready to take a bearish bias if the weak support at 106.47 started to break down early in the New York session.
This was an OK call as the price is now below 106.47 although not by much.
The technical picture looks a little more bearish with that support level now having been invalidated. We have a bearish wedge with looks prone to a sharp breakdown, so I still see a fast downwards movement as the opportunity that is waiting to be picked up on this currency pair.
I will take a bearish bias if the price is below 106.20 and falling with decent momentum at 9am or 10am New York time. I think 105.69 is likely to hold as support if it is reached.
There is nothing of high importance due today concerning either the JPY or the USD.