USDJPY: Look for bullish breakout beyond 109.00
Yesterday’s signals were not triggered, as the bearish price action took place slightly above the resistance level at 109.00.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.48.
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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.50 or 108.07.
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 I was looking for a bullish breakout beyond 109.00 for a long trade entry and would take a bullish bias if the price could close today above 109.00. If a bullish breakout at 109.00 failed decisively, we could see a short trade opportunity instead. Much would probably depend upon how the U.S. stock market performed over the day.
This was a good call as although the level was kind of fudged by the price over the course of yesterday’s New York session, we can see that it basically held so far, even though the U.S. stock market’s benchmark S&P 500 Index went on to make new all-time highs, although the move up was not especially strong.
It seems increasingly likely that the market is waiting for the U.S. FOMC release tomorrow before “deciding” whether to make this crucial breakout beyond 109.00 – but it might still happen before that.
I remain excited about a bullish opportunity here following a decisive breakout above this long-term pivotal level at 109.00.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CB Consumer Confidence data at 2pm London time.