USD/JPY Forex Signal - 7 May 2019

Adam Lemon

Yesterday’s signals were not triggered as the bearish price action took place a little way above the resistance level at 110.88.

Today’s USD/JPY Signals

Risk 0.75%.

Tradesmay only be taken from 8am New York time Tuesday until 5pm Tokyo time Wednesday.

Short Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the nexttouch of 110.88.
  • 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 Trade

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.25 or 109.59.
  • 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.

USD/JPY Analysis

I wrote yesterday that unless there was some progress between the U.S. and China on this (trade) issue, the Yen was likely to remain strong over the day, so I would take a bearish bias if we got a healthy bearish rejection of 110.88 later after New York opens.

This was a good call although unfortunately the turn took place just above 110.88. The picture remains essentially bearish and the support at 110.25 and the major level at 110.00 below that are very important long-term support – a sustained break below 110.00 will be a very bearish sign and a strong move down is looking quite possible, especially if there are further negative developments between the U.S. and China over trade tariffs.

I would take a bearish bias if the price can trade below 110.25 for a couple of hours later, or at a strong bearish rejection of 110.88 on above-average volatility.

USD/JPY Signal

There is nothing important due today concerning either the JPY or the USD.

About the Author
Adam Lemon

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

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