USD/JPY Forex Signal - 31 January 2018

Yesterday’s signals were not triggered, as neither of the key levels were ever reached.

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 hours.

Short Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.85.

  • 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 108.05.

  • 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 price reaches 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

There is a long-term bearish trend, and the Yen is one of the relatively strong currencies over the short term too. However, the micro picture remains complex, as it was yesterday. We are seeing a rejection of the area above 109.00, which is a bearish sign, but also buying closer to 108.00 and the formation of a clearly bullish trend line readying for a key third touch. If the price does not move down to break the lows soon, it will become more likely to make a more decisive bullish reversal, with no obvious obstacle beyond 109.00 to stop its rise all the way to 109.50 or even higher. Right now, I have no directional bias, and see better opportunities before the key U.S. releases later as more likely to arise in other currency pairs. Anything could happen during the latter part of the New York session.USDJPY

There is nothing due today regarding the JPY. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm London time, followed by Crude Oil Inventories at 3:30pm, and the FOMC Statement and Federal Funds Rate at 7pm.

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.