USD/JPY: More bearish
Yesterday’s Signals were not triggered as none of the key support or resistance levels were reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered between 8am New York time Tuesday and 5pm Tokyo time Wednesday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.21.
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 yesterday that increasingly negative and fearful markets were due, but that it was hard to say whether this would strengthen the USD or JPY more, so this pair was likely to range for a while. This was a pretty good call as the price has remained within its price range of the last few days and has not even hit either of the nearest key support and resistance levels.
The picture now is arguably more bearish as the JPY has been stronger than the USD over the past few hours as market sentiment turns increasingly negative, fuelled by the collapse in the price of crude oil futures.
It may not happen today, but I see stock markets as increasingly likely to make sharp price falls, which would probably send the price of this currency pair crashing down below the key 107.00 area which has been firm support. This is a pivotal area so I would take a bearish bias once we get an hourly close below 107.00, using a tight stop loss.
There is nothing of high importance due today concerning either the JPY or the USD.