USDJPY: More bearish below 108.65
Yesterday’s signals may have produced a losing long trade from the bullish bounce earlier at the support level of 108.65.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken between 8am New York time Thursday and 5pm Tokyo time Friday.
Short Trade Ideas
⦁ Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.86, 109.13, or 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
⦁ Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.30, 108.06, 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 although the price was failing to hold up at new highs, I still saw potential for a long trade at any of the support levels below the current price. This has not worked out well, as the price has continued to drop even though the USD is relatively strong, due to the Japanese Yen being even stronger over recent hours.
As the key support level at 108.65 breaks down, it seems clear that the bullish breakout above the key pivotal area at about 109.00 has now failed, and momentum is with the bears.
I will take a bearish bias on this pair today if the price is below 108.65 at 10am New York time, and is breaking to new lows on short time frames very soon after that.
There may be better opportunities to buy the JPY paired with weaker currencies such as the Australian Dollar or the Euro today.
There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of PPI data at 1:30pm London time, followed by testimony by the Chair of the Federal Reserve before Congress at 3pm.