USD/JPY: Long-term resistance 110.07/30
Yesterday’s signals were not triggered, as the resistance level at 110.07 was not reached until after 5pm Tokyo time.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8am New York time Wednesday until 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 109.54, 109.25, or 108.99.
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 thought that the best approach would be to wait for a breakout above 110.07, in which case I would take a bullish bias. This was a good call insofar as it was enough to keep out of trouble, as the price until a few hours ago had remained above support but also below the nearest resistance level at 110.07.
The price has just tried to break above 110.07 but reversed bearishly there immediately.
The USD remains strong, and we have a long-term bullish trend here, so the best approach is likely to be waiting for the New York open later and watching carefully for a decisive breakout above 110.07. This could move quickly as the price has been stuck below this area for a long time, making a strong breakout more likely.
Concerning the USD, the Chair of the Federal Reserve will be testifying before Congress at 3pm London time. There is nothing of high importance due today regarding the JPY.