USD/JPY Forex Signal - 16 October 2017

Last Wednesday’s signals were not triggered, as the bearish price action took place above 112.49 but below 112.77.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken between 8am New York time and 5pm Tokyo time, over the next 24-hour period only.

Short Trade 1

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next entry into the zone between 112.57 and 112.77.

  • 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 Trades

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.52 or 111.25.

  • 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 is still relatively flat and ranging, with low volatility, but the action is starting to look bearish, at least over the short term. This is due to the double top at 112.57 and the steady sell off from there at the local highs within the recent move. It looks likely that the support at 111.52 or even 111.25 will be hit soon, and if it is, a bullish reversal might provide a good long trade opportunity. The long-term ranging environment makes both long and short trades equally possible, but profit targets should be relatively conservative.

There is no long-term trend in this pair.

USDJPY

There is nothing significant due today concerning either the JPY or the USD.

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.