Last Thursday’s signals were not triggered, as the price had already broken below the ascending trend line by 8am New York time.
Today’s USD/JPY Signals
Trades may only be entered from 8am New York time until 5pm Tokyo time, over the next 24-hour period.
· Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.27, 105.90, or 106.10.
· Place 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.
· Take off 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.
I wrote last Thursday that a bearish breakdown seemed increasingly likely as the price action near the trend line got “heavier”. This is what happened quite quickly, with the price falling below 105.00 as stocks sold off and money flowed into the Yen as a safe-haven. This low was a 1-year high. The Dollar is in a long-term downwards trend, and it is being expressed arguably the most strongly against the Japanese Yen. There are now no valid support levels for about 170 pips below the current price, which shows that there is room to move down. All these factors support the bearish case, and I am certainly more comfortable taking short instead of long trades on this pair. However, there has been buying below 105.00, and the price currently looks as if it readying to break up past the nearest resistance at 105.27. A failure to break above that level could provide a short trade entry, so it is a key level to watch and the reaction there is likely to determine the short-term direction of price movement. I have a bearish bias below 105.27.
There is nothing due today concerning either the JPY or the USD.