USD/JPY Forex Signal

Yesterday’s signals were not triggered, as none of the key levels were ever reached.

Today’s USD/JPY Signals

Risk 0.75%.

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

Short Trades

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.83 or 113.56.

  • 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 ride.

Long Trades

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 112.45, 111.94 or 111.66.

  • Put 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 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

I wrote yesterday that I had become less optimistic about a continued rise here right away, I thought that the next real test for the bulls was likely to come at the new support level of 111.94 – I would take a bullish bias if we got a strong bullish bounce there.

I was partially correct, as the price spent most of the London session falling before finally printing a low just a few pips above 111.94 before it began to rise again by more than 60 pips. However, the rise has tailed off, losing momentum, and the price now seems to be supported at a new higher support level of 112.45 which is a bullish sign. The U.S. Dollar came back yesterday against almost every other currency, but it may struggle to rise much further here as there is a prevailing range of low volatility in this currency pair at present.

I think that the two nearby levels today are likely to be pivotal: a break below 112.45 is likely to lead to a fall to at least 112.00 and a break above 112.83 is likely to lead to a rise to at least 113.25.

USDJPY

There is nothing important due today regarding the USD. Concerning the JPY, the Governor of the Bank of Japan will be giving a very minor speech at 9:30am London time.

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.