The price is rising to new 6-year highs on weak Yen.
Today’s USD/JPY Signals
Trades may only be entered prior to 5pm Tokyo time Friday.
Short entry immediately upon the next touch of 123.67.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 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 120.49 or 120.00.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.
The yen is a popular asset during turbulent times.
This currency pair has been on a tear for the past two weeks, breaking up strongly to reach new 6-year highs with very strong bullish momentum. The bullish momentum has been especially strong over the past five days, each of which have seen the price break to a new high – it just keeps on going and easily surpassed the big psychological round number at 120.00 after pausing underneath it for just a few hours.
The price is now trading in “blue sky”, with no obvious resistance level overhead to stop it until 123.67.
There is obvious probably support at about 120.50 and 120.00, both of which levels look very likely to be solid as they are confluent with major round and half numbers.
The US dollar is quite strong, being in a long-term bullish trend, although its short-term momentum has been unpredictable lately although it has recovered over the past day. Yet the real driver of these price changes is the weak Japanese Yen, which remains clearly the weakest major currency. This is mostly because the Bank of Japan is the only major central bank in the world which is trying to raise its inflation rate which is below its target of 2%. Every other major central bank is tightening monetary policy to try to bring down high and rising inflation, so the Bank of Japan has a very divergent monetary policy.
This looks like the important currency pair to keep an eye on. I will be very happy to add to my existing long position I entered several days ago if we get a retracement to 120.50 or 120.00 followed by a bullish bounce.
There is nothing of high importance concerning either the USD or the JPY.