USD/JPY: Yen stronger today
Yesterday’s Signals were not triggered, as the bullish price action took place slightly below the support level identified at 105.28.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken from 8 am New York time Wednesday until 5 pm Tokyo time Thursday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.73, 105.97, 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 104.87.
- 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 we were quite likely to see a bullish movement now up to at least 106.20, so there was some potential for a long trade here.
I was wrong about this, as the price turned bearish near the resistance level at 105.73 and has come down from there in a bearish wave, which is still showing short-term momentum.
Although the support level at 105.20 has been invalidated, it is clear there is still going to be support, probably, in the area of the big round number at 105.00.
If the price can break decisively below 104.87, which is probably the lower boundary of the support I am talking about, the price could fall a lot further as the price will then be trading within bearish “blue sky”.
The U.S. Dollar is relatively weak, and the Yen has become stronger today than other major currencies, so this could give more bearish momentum. Additionally, if we see a strong failure from the new highs today when the U.S. stock market opens, that might cause a flow into the Yen also, pushing the price down even further.
There is nothing of high importance due today regarding either the JPY or the USD.