USD/JPY Forex Signal - 5 December 2018

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Yesterday’s signals produced a long trade following the bullish pin candlestick on the hourly chart which rejected the support level identified at 112.66. This is in floating profit, but it doesn’t look very bullish, so it may be wise to manage this trade very carefully so as not to produce a loss.

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 only.

Short Trades

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 113.16 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 Trades

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 112.66 or 112.19.
  • 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 wrote yesterday that the price was sitting on support now, so if it broke below the lower level at 112.66, that would be a bearish continuation sign and I would take a bearish bias then. Alternatively, the area here might prevent a further fall, but it was too early to think about turning bullish. There was no long-term trend to exploit.

This was a good call in a way as that level was the pivotal level of the day. We got a bullish bounce there, but the bounce is weak and may be running out of momentum already. The price is in a bearish wedge and the new lower resistance level at 113.16 seems to be making its presence felt. Therefore, I would be happy to take a bearish bias if the price attempts to rise above 113.16 and fails after the New York open later. However, I’d advise being very careful of the support at 112.66 dues to its confluence with a trend line as well as the major quarter-number at 112.50.

USDJPY

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

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy