USDJPY: Higher support at 105.86
Yesterday’s signals produced a profitable long trade from the support level at 105.66. As resistance has now been reached, it could be wise to take profit fully in this consolidative environment.
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
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.31 or 106.73.
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.
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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.66.
Put the stop loss 1 pip below the local swing low.
Move 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 it would make sense to take a bearish bias below 105.57, but the area at 105.20 worried me as potential support, there was also the big round number at 105.00 which had to be broken down.
I was correct to see that level as a likely pivotal point, but my focus on the bearish side beneath it never played out – the support held and gave a profitable long trade entry, with all nearby key levels being respected so far as the narrow consolidation continues.
It is very hard to see what the next short-term direction will be, much is likely to be decided by the Preliminary GDP data. All that can be said beyond that is that there is a long-term bearish trend, so my remarks about what happens below 105.57 from yesterday still apply.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Preliminary GDP data at 1:30pm London time.