USD/JPY Forex Signal - 24 December 2018

Last Thursday’s signals produced a long trade entry from the bullish pin candlestick on the hourly chart which rejected the support level identified at 110.89. This trade gave about 27 pips of profit before returning to be stopped out.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered and closed between 8am New York time and 5pm London time today only.

Short Trades

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.46, or 112.10.

  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.89, 110.68, 110.57, or 110.49.

  • 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 as long as the new resistance levels held, we could expect a further downwards move. I took a bearish bias below 112.10. This was a great call as the price continued to fall by close to 100 pips over the rest of the day after I wrote that, before bottoming out at the support level of 110.89.

A look at the price chart below shows that while the picture has remained quite bearish, this support at 110.89 is holding firm. There is a cluster of support levels between 110.49 and 110.89 and of course the 110.00 area is going to be a key psychological level. This suggests that this area will be hard to break and is likely to hold for some time, which is reinforced by the fact that it acted as strong support when it was last reached during the summer months.

I expect that the price will just gently consolidate today between 110.89 and 111.46. It may be possible to scalp bounces at these levels for a few pips – that would probably be the best strategy here for 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.