Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be entered between 8 am New York time Thursday and 5 pm Tokyo time Friday.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.81, 106.07, or 106.50.
- 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 105.20, 104.87, or 104.37.
- 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 it was worth keeping an eye on this currency pair today and seeing whether the price could break above 106.07. I was again ready to take a long trade if we got two consecutive hourly closes above 106.07 after New York opens as it would be a bullish sign.
We did not get a break above 106.07 and the price did not even reach that level.
Support is holding up and the current consolidation pattern below 106.07 is continuing. This is a bullish consolidation, so I want to keep watching for a bullish breakout as the support level at 105.38 continues to hold quite firmly.
It seems likely that the consolidation will not end until we get tomorrow’s U.S. non-farm payrolls data, which could move the price into a more decisive direction.
Meanwhile, the best strategy is likely to be looking for short-term trades from any reversals at the nearest levels such as 106.07 and 105.38.
There is nothing of high importance scheduled today concerning the JPY. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3 pm London time.