USD/JPY Forex Signal

Last Thursday’s signals were not triggered as the bullish price action took place a little way below 109.59.

Today’s USD/JPY Signals

Risk 0.75%.

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

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.29 or 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 109.15 or 109.07.

  • 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

I wrote last Wednesday that the risk-off market sentiment was benefitting the Yen, and that the price was at a key technical point – this area just below the psychological level at 110.00 had been long-term support and resistance. It was also the area of a 50-day low, so I was ready to take a bearish bias if we got an hourly close later below 110.00, or if there was a bearish rejection at a test of the resistance at 110.29.

This was a good call as we did get an hourly close later that day below 110.00 and the price fell further from there and is still well below 110.00.

It looks likely that market sentiment will continue to be risk-off for a while, which should keep the bears in control of this currency pair. I would take a bearish bias if there is a retest and strong bearish failure of 110.29 later today.USDJPYThere 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.