USD/JPY Forex Signal

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USDJPY: Yet more bullish above 107.57

Yesterday’s signals produced a profitable long trade entry signal from the bullish inside candlestick which rejected the support level at 107.26.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be entered between 8am New York time Wednesday and 5pm Tokyo time Thursday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.99, 108.18 or 108.43.

  • 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.

  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.57, 107.48, 107.26, or 107.21.

  • 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.

  • 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 the technical picture was pointing to still higher prices, as long as 107.21 continued to hold. However, I thought that bulls would need to watch out for the cluster of three resistance levels below 108.00. I was ready to take a bullish bias later on this pair if we get a bullish bounce as the support at 107.21 holds.

This was an excellent, perfectly accurate call as we got the low of yesterday at 107.21.

This picture is now even more bullish, as the price has broken above the psychologically important 107.50 level and the precise horizontal resistance at 107.57. The price now has room to rise to 108.00. The bullish movement is probably going to find it much more difficult to progress from 108.00 to 109.00 than it did over the past days to get from 107.00 to 108.00. This is because the area close to 109.00 is a very obvious multi-month resistance level which can be seen on longer-term charts.

Nevertheless, this pair is at the heart of the Forex market right now, and higher prices over the course of today look likely. I would take a bullish bias if we get a retracement to 107.57 and a firm bullish bounce there after New York opens.USDJPYThere is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm 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.