USD/JPY Forex Signal: More bearish as 109.23 holds - 29 January 2020

Adam Lemon

USD/JPY: Risk-off shocks boost Yen

Yesterday’s signals were not triggered, as the bearish price action at 109.18 was not strong enough to give a short trade entry.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be entered from 8am New York time Wednesday to 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 109.23 or 109.74.
  • 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 108.62 or 108.27.
  • 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 yesterday that it still felt like there was scope for more fear over the damage the coronavirus may cause, and this was likely to cause fresh and possibly sudden flows into the Yen. For this reason, I continued to see a short trade from a bearish bounce at any resistance level as the best strategy for trading this pair at present.

This was a good call as the medium-term price action patterns continue to look bearish, even though the U.S. stock market recovered lately which typically boosts the USD/JPY currency pair. I see no reason to change this approach, so I will continue to take a bearish bias here following any bearish reversal at a resistance level, especially 109.23. However, it should be said that the bearish action is not notably strong.

USD/JPY

Concerning the USD, there will be a release of the FOMC Statement and Federal Funds Rate at 7pm London time followed by the usual press conference half an hour later. There is nothing of high importance due today regarding the JPY.

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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