USD/JPY Forex Signal

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USDJPY: Bullish breakout above 109.00 in question

Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level at 109.00 was reached.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken from 8am New York time Wednesday until 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 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.
  • 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 108.95, 108.75, 108.65, or 108.30.
  • 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.
  • 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 yesterday that the picture had become considerably more bullish, and it seemed as if the bulls were going to drive the price up to test this long-term pivotal round number at 109.00. I thought that a bullish breakout above 109.00 could be explosive as it had been building up for a long time and I was ready to take a bullish bias on this pair later if New York closed above 109.00.

We did get a close above 109.00, at 109.15, but at the time of writing the price is 20 pips below that, sitting on a new support level at 108.95. I am still taking a bullish bias, as this pair often pulls back the day after a breakout before taking off again in the direction of the breakout, so I am looking for a rise today or tomorrow. However, one obstacle to a rise is the resistance level I am forced to note at about 109.21 which held late yesterday. If the price cannot close above it before the end of this week, I would give up my bullish bias.

Meanwhile, long trades from bounces at any of the nearby support levels look like being the best opportunities here.

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There is nothing of high importance due today concerning either the JPY or the USD

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.