USDJPY: Support at 105.66 still holding
Yesterday’s signals were not triggered as neither of the key levels were yet reached, although the low of the day was very close to the support level identified at 105.66.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.07, 106.31, or 106.73.
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 105.66.
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 if the price could rise from here, despite the long-term bearish trend, it would be a bullish sign, so I saw 105.66 as continuing to be the important pivotal point for the day.
My weakly bullish bias above 105.66 plus my general approach has been OK as the level has continued to hold. However, today I want to be more neutral, as the price has printed lower resistance just above 106.00, and the price is not looking as if it going to convincingly break out of this narrow range in either direction.
As there is a long-term bearish trend, it would make sense to take a bearish bias below 105.57, but the area at 105.20 worries me as potential support, there is also the big round number at 105.00 which has to be broken down. Yet if this bearish break happens, the price could fall all the way to 103.80 quite quickly. This would probably be triggered by more bad news about global trade which would cause the U.S. stock market to sell off sharply.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.