USD/JPY Forex Signal - 20 December 2017

Wednesday, 20 December 2017 8:19

By: DailyForex.com

Yesterday’s signals were not triggered, as the bearish price action took place a little way above the resistance level identified at 113.00.

 

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered between 8am New York time and 5pm Tokyo time over the next 24 hours only.

 

Short Trade

· Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.28.

· 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 112.83 or 112.37.

· 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

The last day has been more bullish than I had expected. The area close to 113.00 did provide some resistance initially, but the price has now broken above that and the pattern is now looking more bullish. The level at 113.28 is likely to be a big test: if the price breaks strongly and cleanly above that, it will be a very bullish sign. When American stocks are rising with confidence, this pair usually goes up too, and that scenario is supported by the final passage of the U.S. tax cut in Congress today. I have a slight bullish bias as the long-term bullish trend has technically returned, although it should also be noted this long-term trend ranges a lot and is not strong over a multi-month period.USDJPY

Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time. Concerning the JPY, there will be a release of the Bank of Japan’s Monetary Policy Statement, followed by the usual press conference at 6:30am.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.

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