USD/JPY Forex Signal

Yesterday’s signals were not triggered, as there was no bearish price action at 111.87.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken from 8am New York time Tuesday and 5pm Tokyo time Wednesday.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.00 or 112.10.
  • Place 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 111.58 or 111.23.
  • Place 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.

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USD/JPY Analysis

Yesterday I wrote that I felt even more strongly now that a sustained break above 112.10 would be a very important and significant bullish sign, and I would gladly take a bullish bias above there if such a break happened on above-average volatility.

On the short side, I didn’t have much confidence, as there are several support levels close below, which would surely take quite a while to be broken down.

As it happened, the 112.00 resistance area held, and the price spiked down following comments by the Japanese Finance Minister who questioned the value of the Bank of Japan’s dovish monetary policy. Yet the price seems to have recovered quickly to the point where this is not important any more.

The picture is somewhat less bullish, but I still see a sustained break above 112.10 as a significant bullish sign, if it happens. The supportive area at 111.58 plus the trend line near there looks attractive as a potential entry point for a long trade.

I would take a bullish bias if the price can trade above 112.10 for a couple of hours later.

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.