USD/JPY Forex Signal

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USDJPY: Bulls failing at 108.71?

Last Thursday’s signals produced a losing short trade from the bearish rejection of the resistance level at 108.51.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be entered 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 108.71 or 109.07.

  • 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 107.50.

  • Put 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 Thursday that the price made a high just below the nearest resistance level at 108.51, so there was residual bearishness and a long-term bearish trend. However, we had seen several days of consolidation, so I thought that a bullish reversal after a bullish break above 108.51was becoming increasingly likely.

I was ready to still take a bearish bias if there was a strong bearish rejection of 108.51 following another retest of that level. We got such a rejection, but unfortunately it produced little and was soon stopped out.

There has been a recovery in the USD, and this has pushed the price up after the bottoming near 108.00. However, the next resistance level at 108.71 has continued to hold, so we may well see a further downwards movement over the coming hours.

A sustained break above 108.71 would be a bullish sign.USDJPYThere is nothing important due today concerning either the USD or the JPY.

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.