USD/JPY Forex Signal - 7 January 2016

USD/JPY Signal Update

Yesterday’s signals could have produced a very profitable short trade off the rejection of the support level at 118.72.

 

Today’s USD/JPY Signals

Risk 0.50%

Trades may only be taken from 8am New York time until 5pm Tokyo time.

 

Long Trade 1

* Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 116.82.

* 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 run.

 

Short Trade 1

* Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 118.00.

* 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 run.

 

Short Trade 2

* Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 118.78.

* 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 run.

 

USD/JPY Analysis

The situation continues: JPY is the strongest of all currencies, as it is seen as a “risk off” currency and risk right now is well and truly off! Even though the USD is the second strongest currency, this pair is moving quite firmly downwards and every time it touches an obvious resistance level on a pullback it plummets. This happened again yesterday at 118.72.

We have broken below another crucial support level at 118.00 and there is no end to the bearishness in sight. What is in sight is the next potentially supportive level at 116.82, which might be a launching pad for a deeper bullish pullback which will have to occur sooner or later.

USDJPY

There is nothing due today concerning the JPY. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.