Last Thursday’s Signals were not triggered as none of the key levels were reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Monday to 5pm Tokyo time Tuesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.21 or 108.59.
- Place 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.
- 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
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.23 or 107.01.
- Place 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.
- 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 last Thursday that the best potential opportunity looked to be on the long side – a bullish bounce at the ascending trend line shown in the price chart below could see the price rise to the 108.00 area. Still, I thought that there probably would not be a lot of pips in such a move. I was partially correct as the impulsive move was upwards, but the price quickly dropped back and then slowly began to turn more bearish.
The Japanese Yen is not strong, but the U.S. Dollar is weak. So, the price here is dropping and has breached a key former support level at 107.23. The Bank of Japan’s announcement earlier of stronger bond buying should if anything weaken the Yen, but its really all about the Dollar. However, this may at least mean that the price will not manage to get below the lower support level at about 107.00.
I would be prepared to take a long trade at a bullish bounce at 107.02 but without much confidence – I would monitor such a trade very carefully on a short time frame. I think it will probably be best to stand aside from trading this currency pair today on anything except very short-term trades.
There is nothing of high importance due today concerning either the JPY or the USD.