USD/JPY Forex Signal

Last Thursday's signals were not triggered, as none of the key levels were reached that day – the high was just two pips below the nearest resistance level at 111.14.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered from 8am New York time until 5pm Tokyo time, over the next 24-hour period.

Short Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.14.

  • 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.

Long Trades

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.00.

  • 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.

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

I wrote last Thursday that the technical picture had become messy, but arguably very slightly bearish with a recent key higher low and higher high. I was prepared to take a weakly bullish bias here if the price could get established above the resistance level at 111.14. It was not able to do so and swung down again before making the current bullish retracement.

This pair is difficult to trade now, with both currencies quite strong. There is still a wide bearish price channel, but there are various trend lines pushing the price in all directions, mixed up with horizontal support and resistance levels. This points to continued congestion and consolidation. I think the only truly interesting trade from the chart would be a short at a bearish reversal at 111.14 due to the confluence there of the bearish trend line of the upper channel and key horizontal resistance. I have no short-term directional bias here today

USDJPY

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

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.