USDJPY: Bullish breakout from price channel threatens 108.86
Last Thursday’s signals were not triggered, as none of the key levels given were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Monday until 5pm Tokyo time Tuesday.
Short Trade Ideas
⦁ Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.13 or 109.48.
⦁ 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 Ideas
⦁ Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.27 or 108.06.
⦁ 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 last Thursday that I saw the best opportunities as likely to be either a short trade from 108.86 due to the confluence of horizontal resistance and the upper bearish channel trend line at this point, or a long from 108.06. Neither level was hit, but this approach was at least enough to stay out of trouble.
I was correct about 108.86 being significant resistance, as the price has for the past few hours been trying to break above it without success. Nevertheless, the bullish breakout from the wide bearish channel shown within the price chart below is a bullish development. The problem for anyone wishing to trade this pair is that price action is very choppy and congested, and volatility is extremely low, so the price is not moving much, and when it does move, it moves with little directional momentum.
The best I can say here is that if the price gets established above 108.86 over the first hour or so of the New York session, it has a good chance to hit at least 109.13. Yet there will probably be better opportunities today in EUR/USD or GBP/USD.
There is nothing of high importance due today concerning either the JPY or the USD.