USD/JPY Forex Signal: More bearish as 109.23 holds - 30 January 2020

Adam Lemon

USD/JPY: Risk-off shocks boost Yen

Yesterday’s signals produced a short trade which is in floating profit from the bearish rejection of the resistance level I had identified at 109.23.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken between 8am New York time Thursday and 5pm Tokyo time Friday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 109.23 or 109.74.
  • 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 108.62 or 108.27.
  • 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.

USD/JPY Analysis

I wrote yesterday that the medium-term price action patterns continued to look bearish, so I would continue to take a bearish bias here following any bearish reversal at a resistance level, especially 109.23. However, I also said that the bearish action was not notably strong.

This was an excellent call as the resistance at 109.23 held and provided a short trade entry, but as I suggested, the price has not fallen by a great deal. Unfortunately, the Forex markets remain stuck in very low relatively volatility meaning it is tough to make much money these days even when you are right about levels for entry and price direction.

I think this pair remains vulnerable to further declines as long as fears over the coronavirus outbreak continue to rise, but the moves will be stronger in Yen crosses with commodity currencies such as AUD/JPY and NZD/JPY.

I will take a bearish bias here if the price can get established below the nearest support level at 108.62 as it is about time the price made a stronger downwards movement to be really bearish.

USD/JPY

There is nothing of high importance due today regarding the JPY. Concerning the USD, there will be a release of Advance GDP data at 1:30pm London time.

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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