USDJPY: Bearish below 105.69.
Yesterday’s signals were not triggered, as the price never reached 105.83.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday to 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.69, 105.83, or 106.30.
Put 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.
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 had new lower resistance at 105.83. This produced a more bearish picture. I was prepared to take a bearish bias if the price was below 105.25 at 9am New York time and falling, but although it was below that level it had already started to rise and fortunately this was enough to keep out of what would have been a losing short trade depending upon the stop loss used. I was worried about the area very close to or at the major round number of 105.00 being supportive and it seems we are continuing to see that even though there are no key support levels until 103.80 and the price, at least theoretically, has plenty of room to fall.
I think if the price can get established below 105.00 it will be likely to fall again sharply all the way to 103.80, but the 105.00 area may hold for a while. A lot is likely to depend upon the U.S. stock market and whether it start to sell off more sharply, which would tend to strengthen the Yen.
I see today’s pivotal point as likely to be 105.00 and if the price is below that and falling at 8am or 9am New York time today I would take a bearish bias.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.