USD/JPY Forex Signal - 9 October 2018

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Yesterday’s signals were not triggered, as there was insufficiently bullish price action at 113.13.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken between 8am New York time and 5pm Tokyo time, during 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 113.56 or 114.18.

  • 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 Trade

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 112.41.

  • 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 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 noted yesterday that the price was finally breaking strongly below the long-term bullish trend line. There was strong bearish momentum and I thought that we were quite likely to see 113.13 soon. I thought that what happened at that level was likely to be crucial during the Asian session later. The price made 113.13 easily and this did forecast a further drop by about another 33 pips. The price then recovered somewhat, but there are now initial signs of a bearish double top having formed at 113.40. The Yen is quite strong now after a period of relatively low volatility, so despite the long-term bullish trend, it would not surprise me if the price fell further soon. The bearish trend line shown in the price chart below is confluent with a generally resistant area above 113.40 and this area is likely to be pivotal now: failures there might provide nice short trade entries.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.