USD/JPY: Bullish Breakout Beyond 110.00 in Doubt
Last Thursday’s signals were not triggered, as none of the key levels were reached yet.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York and 5pm Tokyo time Tuesday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.69.
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 109.18 or 109.00.
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 if today’s New York close was not above 110.00 then this was probably going to be a failed breakout beyond 110.00 and we would instead see the price fall. If the day closed above 110.00 then I would take a bullish bias.
This was a good call as the day did close above 110.00, and the price has maintained a very weak bullishness, and printed a new higher support level above 110.00 at 110.07 which continues to hold up. However, movement is very slight, with very low volatility, and the bullish advance looks fragile and liable to break down suddenly.
The odds are still in favour of the bulls overall but watch out for a sudden bearish breakdown to a price below 110.00 on much stronger volatility – this would signify the start of a retracement which could go as low as 109.18.
Regarding the JPY, the Bank of Japan will release its Monetary Policy Statement and Outlook Report late in the Tokyo session. There is nothing of high importance due today concerning the USD, as it is a public holiday in the U.S.A. today.