USD/JPY Forex Signal

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

  • Go short following a bearish price action reversal on the H1 time frame imediately upon the next touch of 111.54 or 112.10.
  • 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 Trades

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 111.21, 110.88, or 110.54.
  • 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 the picture still looked basically bullish as the price traded within a medium-term bullish price channel which is shown intact within the chart below. I would still take a bullish bias if we get a retrace to 111.21 and a strong bullish bounce there but I would be more bullish still above 112.10.

There is no real long-term trend, but bulls have certainly had mostly the upper hand over recent weeks. The buying of recent hours also looks quite healthy. For these reasons I am inclined to take a cautious and mild bullish bias.

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There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of CPI data at 12:30pm London time, and FOMC Meeting Minutes at 6pm.

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.