Strong US Dollar is pushing price higher.
The yen is a popular asset during turbulent times.
My previous USD/JPY signal on 1st February was not triggered, as there was no bullish price action when the support levels which I had identified at ¥129.41 and ¥128.88 were first reached that day.
Today’s USD/JPY Signals
Risk 0.75%.
Trades may only be taken before 5pm Tokyo time Tuesday.
Short Trade Idea
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of ¥132.88, ¥133.28, or ¥134.00.
- 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.
- Take off 50% of the position as profit when the price reaches 50 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 timeframe immediately upon the next touch of ¥131.79, ¥130.35, or ¥129.75.
- 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.
- Take off 50% of the position as profit when the price reaches 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
In my previous forecast for the USD/JPY currency pair, I wrote that the FOMC release would likely see a reversal from support or resistance levels. I was correct to expect a major low or high that day, but unfortunately, it did not take place at any of the levels which I had identified.
This pair is in focus today as we have a strong US Dollar and a weak Japanese Yen, with both currencies the object of much speculation.
The Dollar is strong because markets are becoming increasingly convinced that the Fed will keep hiking rates until at least 5.25%, while the Japanese Yen is being discussed more as the Bank of Japan moves closer towards appointing a replacement to Kuroda as Governor, which could yield significant policy changes. There is also some concern about an inflow into the Yen as Japanese yields are now higher. None of these issues mean the Yen is necessarily going to weaken, they just mean that more institutions are now going to be betting on the Yen one way or another.
The technical picture has become more bullish as we have printed higher support at ¥130.35 after the support level at ¥129.75 held easily following a near test. An even more bullish sign is that the price has broken up to get established above the former resistance level near ¥131.79, which has now flipped to become support.
As long as the price remains above ¥131.79 today, I think it will continue to rise towards ¥132.88 where bulls will face a stronger challenge. There are no scheduled events today likely to be capable of changing Forex market sentiment.
There is nothing of high importance scheduled today regarding either the USD or the JPY.
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