USD/JPY Forex Signal - 5 February 2019

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Yesterday’s signals were not triggered, as the bearish price action took place above 110.04.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken between 8am New York time and 5pm Tokyo time today.

Short Trades

Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.04 or 110.52.

Put 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 109.74 or 109.15.

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 the bullish move was strong but counter-trend, so was liable to run out of steam. I thought that 110.04 was likely to hold but I would still be nervous taking a bearish reversal there today. This was a good call as it reflected what has happened over the past 24 hours.

I think the picture is a little more bullish now, and we may well see a bigger break above 110.00 later. Much is likely to depend upon the USD data release due later. I would take a bullish bias after that time if the price can hold above 110.04 for a couple of hours on relatively high volatility.USDJPYThere is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm 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.