Yesterday’s signals were not triggered, as none of the key levels were reached yesterday.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be entered from 8 am New York time Wednesday to 5 pm Tokyo time Thursday.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.81 or 106.08.
- Put the stop loss 1 pip above the local swing high.
- 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.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 105.23 or 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 it looked likely that reversals at both key support and resistance levels could produce a modest profit in this currency pair, so that would probably be the best strategy to take here.
This was a relatively OK call as the price has basically continued to range between 105.00 and 106.00, although the support level at 105.40 broke down.
There is no real change to the technical picture, which is one of range and consolidation. The best approach here will probably be to trade reversals from extremes such as 106.08 or 104.87 if and when they are reached so I will look for a long at either of the nearest two support levels, or a short from 106.08.
Both the U.S. Dollar and the Yen are acting as safe havens within the dominant risk-on / risk-off market paradigm, which is why opportunities in trading this currency pair are quite limited.
There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time.