Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at 105.52 was first reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8 am New York time Tuesday and 5 pm Tokyo time Wednesday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.81 or 106.08.
- 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 105.49, 105.31, 105.20, 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 as long as the resistance level at 105.52 continued to hold it would remain pivotal, and I was still prepared to take swing trades short from that level or from any of the higher resistance levels I have identified above it.
I was right about the level at 105.52 being pivotal as after breaking above it now seems to have flipped to become quite strong support, as it continues to hold up.
The technical outlook is now weakly bullish over the short term, and we see the price continuing to build higher and higher support levels. However, there is still a weak long-term bearish trend in force which might reassert itself, so I remain interested in short trades from reversals at any key resistance level.
Volatility remains very low in this currency pair.
There is nothing of high importance due today concerning either the USD or the JPY.