Yesterday’s signals have produced a long trade entry from the bullish inside candlesticks rejecting the support level at 113.28. The trade is in profit as at the time of writing and ideally should be exited in profit before 6:30pm today if possible. Monitor carefully if it reaches yesterday’s high for a bearish failure.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered from 8am New York time until 5pm Tokyo time, during the next 24-hour period only.

Protect any open trade by 6:30pm.

Short Trades

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 114.07 or 114.50.
• Put 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 ride.

Long Trades

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 113.28 (if entry not already taken) or 112.35.
• Put 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 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.

USD/JPY Analysis

I wrote yesterday that I had a cautiously bullish bias, and this has worked OK as the support level has held nearby and has been good for at least a few green pips so far. I maintain that bias but the FOMC releases are coming in a few hours and are likely to produce a lot of movement in this pair, so for a few minutes at that time the technical will probably become completely irrelevant. There are weakly bullish trends on all time frames, so I maintain a long bias, but a spike below support is quite possible later. It would be most conservative to take profits on any long trade as early as possible.

(Click on image to enlarge)

There is nothing important due today concerning the JPY. Regarding the USD, there will be a release of CPI data at 1:30pm London time, followed by Crude Oil Inventories at 3:30pm, and FOMC economic projections, Statement, and the Federal Funds Rate at 7pm. Finally, the FOMC Press Conference will begin half an hour later.