Yesterday’s signals were not triggered as the price action at 104.37 was not bullish enough to generate a long trade entry signal, although the level-capped the day’s low as strong support.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8 am New York time Thursday to 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 104.87, 105.20, 105.31, or 105.49.
- 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 104.37.
- 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 I thought everything would now depend upon whether the price got established below 104.87 (bearish sign) or whether the long-term range would hold, and the price holds up from 104.87.
If the price did break lower, I saw that there could be another long-term long trade opportunity at 104.37 which is even more important than 104.87 as a boundary of the long-term price range.
This was a good and accurate call as the price broke below 104.87 and then proceeded to 104.37 as expected, where it made a bullish turn.
The price has just hit a new 50-day low which is a bearish sign, but I will not be truly bearish until the price gets established below 104.37 which is the really pivotal point here. If 104.37 holds, we could see the start of a long-term bullish move.
I will take a long trade from another firm bullish bounce at 104.37 but I am also ready to go short from a bearish reversal at any of the resistance levels identified above the current price.
This pair has been boring for a long time with very low volatility, but it seems to be changing so it worth paying attention to this currency pair right now.
There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30 pm London time.