USD/JPY: Longer-term bullish breakout still probable
Yesterday’s signals produced a short trade from 110.07 which gave the minimum 20 pips of profit.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.07 or 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 yesterday that I would be prepared to take a short trade from a bearish reversal following another touch of 110.07. Another factor making me bearish was the way that we are seeing the tops of recent candlesticks rejecting the round number at 110.00 very clearly.
This was a good call as we got this bearish reversal at 110.07 yesterday. However, it only produced about 20 pips of short profit before turning around and recovering to again test this resistance level at 110.07.
The recent bullish long-term breakout is still valid, but if today’s New York close is below 110.18 it would start to look doubtful and if below 110.07 even more doubtful.
I would be more bullish above 110.07 intraday today and more bearish as long as the price stays below that level.
There is nothing of high importance due today concerning either the JPY or the USD.