USDJPY: Bullish above 109.50
Yesterday’s signals were not triggered, as there was insufficiently bullish price action when the price reached the anticipated support level at 109.50. However, the level did hold to the pip so was effective.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Tuesday to 5pm Tokyo time Wednesday.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.96.
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 109.50 or 108.96.
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 would sit sit tight on this pair as we may be seeing a return to ranging conditions, but I was ready to take a bullish bias at the end of the day if we saw a New York close above 109.50. We did, and the price has continued to rise quietly.
We are seeing signs of a long-term bullish breakout, but volatility is very low. However, if the price can rise with some momentum and get above the key psychological area at 110.00, it has scope to rise quickly by maybe 200 pips or so. The USD is in a long-term downwards trend but has recovered somewhat this week. The real factor here is Yen weakness.
I take a weakly bullish bias above 109.50 and would take a more decisive bullish bias on this pair if the New York close is higher than 109.55 today.
There is nothing of high importance due today regarding the JPY or the USD.