USDJPY: More bullish above 106.72
Last Thursday’s signals produced a short trade entry from the bearish reversal off the resistance level identified at 107.21. This trade would be floating at about break even and I think it would be wise to close it immediately as the technical picture now looks more bullish.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.21, 107.26, or 107.57.
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 Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.72, 106.44, or 106.08.
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 last Thursday that I would prefer a long to a short trade if it set up – ideally from a bullish bounce at 106.08. As this pair was still very rangebound, I thought that profit targets should be relatively conservative. I was wrong about the precise level for support behind this move, but I was right about direction.
The support at 106.72 was resistance for a long time, holding the price down effectively. Now it has been broken, the price is weakly bullish, but the break is significant. As risk sentiment improves, the price here should slowly rise. The difficulty bulls have is the large number of resistance levels we have close to the current price.
I take a weakly bullish bias and would look for long trades at any solid bounce at an identified support level.
There is nothing of high importance due today concerning either the USD or the JPY.