USD/JPY Forex Signal - 9 December 2019

Adam Lemon

USDJPY: Weakly bearish but key support close

Last Thursday’s signals were not triggered as the bearish rejection of the resistance level identified at 108.94 unfortunately took place a couple of hours before the New York open.

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 Idea

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.94.

  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.27 or 108.06.

  • 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.

USD/JPY Analysis

I wrote last Thursday that what would happen was likely to be determined by whether the price got established above 109.00 (bullish) or below 108.75 (bearish) – these were the day’s likely pivotal points. This was a great call as the resistance just below 109.00 held and the price moved down over the day.

The technical picture and short-term momentum continue to be weakly bearish, but the area between 108.27 and about 108.40 has acted as effective support over recent days. We may be in a deep bearish pullback within a weak long-term bullish trend, so I see the best potential opportunity here as a long close to 108.27 if we get a firm bullish reversal at or close to that price. If it happens, I would take a cautiously bullish bias. If the U.S. stock market index goes on to make new all-time high prices, that would probably help bulls here.USDJPYThere is nothing of high importance due today concerning either the JPY or the USD.

Adam Lemon

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

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