[ad_1]
The Japanese Yen is the weakest major currency.
My previous USD/JPY signal on 4th May produced a profitable short trade from the bearish rejection of the resistance level at ¥134.83.
Risk 0.75%.
Trades may only be taken prior to 5pm Tokyo time Friday.
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of ¥141.63 or ¥142.00.
- 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 entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of ¥140.94, ¥139.83, or ¥139.03.
- 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.
In my previous forecast for the USD/JPY currency pair, I wrote that the support level at ¥134.45 was likely to be the day’s pivotal point. This was a good call once we got two consecutive lower hourly closes below that point, the price was able to fall considerably further.
Several weeks have passed and the technical picture in this currency pair now looks much more bullish, with the price powering ahead in recent days to reach a new 7-month high and making a bullish breakout yesterday above the round number ¥141.00.
The key driver in this current movement is the renewed weakness of the Japanese Yen, as the Bank of Japan holds onto its ultra-easy monetary policy while every other major central bank is tightening or is at least on a tightening path.
Ass to this the fact that although the US Dollar is still just about within a long-term bearish trend, it has risen over recent hours and continues to be a relatively strong currency over the medium-term, with the Fed clearly signalling yesterday that despite its pause in hiking rates, more rate hikes can be expected later this year – most analysts are expecting another 0.25% rate hike at the Fed’s meeting next month.
The bullish momentum and trend should be respected here – there is no reason not to, or to look for short trades – so I see the best approach as looking to enter a new long trade following a bullish bounce at a key support level.
Regarding the USD, there will be a release of US unemployment claims data at 1:30pm London time. There is nothing of high importance due today concerning the JPY as it is a public holiday in Japan.
Ready to trade our free Forex signals? Here is the the best Forex brokers list for you to review.
[ad_2]