USD/JPY: Support at 107.34 looks pivotal
Yesterday’s Signals were not triggered as there was no bearish price action at any of the resistance levels which were reached yesterday.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered from 8am New York time Tuesday until 5pm Tokyo time Wednesday.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.59, 108.04, 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
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.34 or 107.02.
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 as the medium-term trend was still bearish in this currency pair, so I would have been happy to take a short trade if we had gotten a strong bearish reversal at 107.34.
I also said that if instead the price got established above 107.34 that would be a bullish sign.
I was correct in identifying 107.34 as the day’s pivotal point, as once the price broke above that level after encountering some slight initial resistance, it rose over the rest of the day by almost an additional 40 pips.
The technical picture is now more bullish although the resistance level at 107.59 is still having an effect at holding down the price.
I would not take any short trades today, but I would be prepared to take cautious long trades from bullish bounces at either 107.34 or 107.02. I am cautious due to the lack of any real long-term trend in this currency pair.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.