USD/JPY: Flat as both currencies following same paradigm
Yesterday’s signals were not triggered as there was no bullish price action when the support level identified at 107.10 was reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8 am New York time Wednesday and 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 107.10, 107.43, 107.76, or 107.87.
- 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 106.87, 106.70, 106.43, or 106.15.
- 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 a bullish bounce at 106.43 was starting to look more attractive as the price continued to keep some distance from that area. I was also prepared to take a short trade from a bearish reversal at 107.87. I had no directional bias.
My general approach of expecting the price to continue ranging within the same area has been proven to be correct for another day, as the price just continues to go backward and forwards between 106.70 and 107.43.
A break below 106.70 would be a bearish sign as it has already been significantly touched three times. The resistance at 107.43 remains crucial, probably because it is confluent with the major psychological quarter-level at 107.50.
I would be happy to trade reversals from either of those two levels.
This pair’s action remains dull because both the Dollar and the Yen are acting as safe havens at the same time, within the Forex market’s currently dominant risk-on/risk-off paradigm.
There is nothing of high importance scheduled today concerning either the JPY or the USD.