USD/JPY Forex Signal - 21 March 2019

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Yesterday’s signals could have produced a losing long trade from the bullish doji which rejected the former support level at 111.45, but I did warn about trading before the FOMC release which gave a huge downwards move.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken from 8am New York time Thursday until 5pm Tokyo time Friday.

Short Trades

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.73 or 111.31.
  • 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.
  • Remove50% 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 110.27, 110.04, or 109.59.
  • 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.

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USD/JPY Analysis

I wrote yesterday that we would probably get some more direction and possibly a decisive breakout after the FOMC release due later. Until then, the price was likely to continue to range between levels. This was a great call, as this exactly what happened. The bearish breakout has been strong, firmer than the break almost anywhere else, although it has not reached very long-term lows. The key thing is to understand that the Fed weakened the USD yesterday by lowering rate hike forecasts and predicting weaker economic growth. This has led to a sell-off in the USD and stock markets which has sent money flowing into safe havens such as the Japanese Yen and Gold. For this reason, it makes sense to take a medium-term bearish bias, although the price may not fall lower than 110.26 over the short-term. I would take a bearish bias today if the price retraces to 110.73 and rejects it firmly.

USD/JPY Forex Signal

There is nothing of high importance 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