USD/JPY Forex Signal

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USDJPY: Bearish below 105.83.

Last Thursday’s signals were not triggered as 106.30 was never reached.

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 Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.83 or 106.30.

  • 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.

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 we had a conflicted situation in this pair, because although there was a new lower resistance level which formed at 106.30, the price just wouldn’t spend much time below 106.00 before bouncing back.

I was ready to take a bearish bias if we had gotten two consecutive hourly closes below 105.85 during the first half of the New York session, although I did not think this would happen that day. This was a good call as this area was the pivotal point of the day and it held up during the early part of the New York session.

That support has now finally broken down, flipping to new lower resistance at 105.83. This produces a more bearish picture. There is not much momentum, but the price action looks reasonably bearish on all time frames as the price heads towards new lows. I would take a bearish bias if the price is below 105.25 at 9am New York time and falling, but traders should monitor any shorts in this area very carefully for risk as we could see buyers stepping in at or very close to the big round number and psychological level at 105.00. Below that price, there is a lot of room for the price to fall as there are no key support levels until 103.80.USDJPYThere is nothing of high importance 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.