USD/JPY Forex Signal

Yesterday’s signals were not triggered, as there was no bullish price action at 113.14.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken between 8am New York time and 5pm Tokyo time over the next day.

Short Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of any of the trend lines shown in the price chart below.

  • 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 112.75, 112.66, or 112.19.

  • 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 yesterday that as both the Dollar and Yen are “risk-off” assets while riskier assets were getting a boost, we saw little action here, so this pair was probably best avoided in the current sentiment environment. I had no directional bias. This was a missed opportunity, as the price has turned strongly bearish as stock markets have started to sell off again, boosting the Yen. Long-term charts show the area above 114.00 has acted as long-term resistance over the past couple of years or so, therefore there may also be wider technical factors at work. The price is sitting on support now, so if it breaks 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 is too early to think about turning bullish. There is no long-term trend to exploit.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.