USD/JPY Forex Signal

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USDJPY: Ranging between 107.50 and 108.75

Last Thursday’s signals were not triggered, as there was no bearish price action at 107.94.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be entered prior to 5pm Tokyo time Tuesday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.75 or 109.07.

  • Place 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 Trade Ideas

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.28, 108.14, 108.06, or 107.94.

  • Place 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 last Thursday that there was still a ranging environment, but I thought that a bullish bounce at 107.50 might produce a meaningful move up to the 108.00 area so I was ready to take a bullish bias if that had happened, until 107.94 is hit. This was a relatively good call, as the price got to a low about 5 pips away from 107.50 before rising strongly.

We basically have a ranging, trendless environment in this currency pair, between about 107.50 and 108.75. This would indicate fading the extremes of this range, but with the U.S. stock market making a new all-time high price last week, I am more inclined to be bullish on this pair, so I see bounces at support levels as likely to be the best option. We have a new higher support level at 108.28 which has given a strong bounce.

If the price can gest established above 108.75 later, that would be a very bullish sign.USDJPYThere is nothing of high importance due today regarding 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.