USD/JPY: Yet 105.00 may be area of strong support
Yesterday’s signals produced a short trade from the bearish reversal at the resistance level identified at 105.67 a few hours ago. This trade is currently in profit.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8 am New York time Tuesday to 5 pm 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 105.67, 106.15, or 106.43.
- 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 105.11 or 104.09.
- Put the stop loss 1 pip below the local swing low.
- Adjust 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 if the price could get established below the key psychological round number at 105.00 (after breaking below the key support level at 105.21), it could fall a lot further as it would be in “blue sky” with very few support levels remaining down there.
I was happy to take short trades from any of the key resistance, but I would keep trade position sizes relatively light.
This was a fairly good call as the reluctance to even touch the level I talked about at 105.00 signaled a deeper bullish retracement, but only to the first resistance level at 105.67 where we saw a bearish reversal a few hours ago.
The price is now moving down and seems quite likely to reach at least yesterday’s swing low at 105.11 and maybe even 105.00.
How the price behaves if and when this area close to 105.00 is reached will probably be revealing. If it holds firmly below 105.00 then we are likely to see a much steeper fall. If we get another bounce, it could be a long or at least medium-term low price.
I will take a bearish bias if we see a New York close below 105.00 which is also very close to the low of today’s price range.
There is nothing of high importance scheduled today concerning either the JPY or the USD.