USDJPY: Major bearish reversal from 109.00
Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 108.79.
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 Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.50, 108.79, or 109.00.
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 108.07 or 107.78.
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 saw the key thing to watch for as whether the price broke above 109.00 upon the FOMC release and stayed there over the first hour following the release.
Although I was looking to take a long bias, this was a great call insofar as it identified 109.00 as a really key long-term pivotal point. The price failed to hold above that level despite initially spiking as high as 109.30 before falling sharply on long-term selling.
The price is still showing bearish momentum, so today I would look to take a short bias if we get a bearish bounce at any of the key resistance levels identified above following a bullish retracement.
There is nothing of high importance scheduled today concerning either the USD or the JPY.