USD/JPY Forex Signal

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USDJPY: Pivotal area from 108.60 to 109.00

Yesterday’s signals were not triggered, as there was no bearish price action at 108.71.

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

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.00 or 109.48.
  • 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 Idea

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.07.
  • 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 I would take a bullish bias on this currency pair if we had gotten a firm bullish bounce at a first touch of 108.07 later today. The price never pulled back as far as that before rising to get quite close to the 109.00 level.

The action still looks bullish, especially if the support at 108.60 holds up. This area between that level and 109.00 is a very key pivotal zone, marking a long-term multi-week double top. If the price can get established above 109.00 it will be a very bullish sign. Alternatively, the price could be quite likely to make a major move down from here if it keeps failing to get above 109.00, so this currency pair is worth paying attention to right now.

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There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time.

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy