USD/JPY Forex Signal - 25 July 2017

Yesterday’s signals were not triggered as the bullish price action took place well below the support level identified at 110.91.

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.

Short Trades

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.39 or the upper channel trend line shown in the chart below currently sitting at about 111.48.
  • Place 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.
  • Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.

Long Trade 1

  • Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.65.
  • Place 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.
  • Remove 50% of the position as profit when the trade is 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

The price yesterday dipped well below the anticipated support, but then recovered strongly to reach close to the resistance level at 111.39 before turning around and falling again. There is a long-term bearish trend and the medium-term bearish channel remains intact. There will soon be a confluence of a horizontal resistance level at 111.39 and the upper trend line of the bearish channel, which could provide a powerful entry for a short trade.

I take a bearish outlook but it is worth noting that the trend in this currency pair is much weaker than the trend in other USD pairs such as EUR/USD, so is likely to be less reliable. This also makes it possible to try a conservative long trade from a strong rejection of the support level at 110.65.USDJPY

There is nothing due today concerning the JPY. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm 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.