USD/JPY Forex Signal - 1 August 2019

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USDJPY: Bullish breakout to new 2-month high price

Yesterday’s signals were not triggered, as there was insufficiently bearish price action at either 108.76 or 109.09.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken from 8am New York time Thursday to 5pm Tokyo time Friday.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.48 or 109.96.

  • Put 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 Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 109.00 or 108.70.

  • 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 yesterday that both currencies were relatively strong. Probably the price would again move little until the FOMC releases due later, to which this currency pair is usually very sensitive. This could push the price anywhere. A sustained break above 109.07 would be a very bullish sign. There was probably more upside potential than downside.

This was a good call, as the stronger USD pushed the price up to a new 2-month low and invalidated the former strong resistance level at 109.07.

The outlook is certainly more bullish, the problem here is that the JPY is relatively strong, so the price does not seem to be able to make strong bullish progress.

Nevertheless, I would take a cautiously bullish bias if there will be a firm bullish bounce at any of the support levels nearby.USDJPYThere is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time

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.