USD/JPY Forex Signal: Bullish Breakout Above 109.74 - 6 February 2020

Adam Lemon

USD/JPY: Long-term resistance above 110.00

Yesterday’s signals were not triggered as there was no bearish price action at 109.74.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken from 8am New York time Thursday to 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 110.07 or 110.69.

  • 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 109.74 or 109.25.

  • 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 we may get a bearish retracement at or near to 110.00, but after that, I would be very interested to take a long trade from a bullish bounce at the new probably flipped support level at 109.24. I was generally bullish up to 110.00.

This was a good call as it reflected what happened yesterday as risk sentiment continued to improve, and stock markets rose to new all-time high prices.

The price here got very close to the big round number at 110.00 yesterday and then started to make what looks like being a bearish retracement from that area. This is still only a normal retracement, so we may have a chance here for a long trade entry following a bullish bounce at the new support at the former broken resistance level at 109.74.

There is good reason to remain bullish, but we are approaching a very pivotal multi-month high near 110.00 which is confluent with a big round number, and this resistance may well be too strong to break decisively in the near future.

The USD has reached a very pivotal moment both here and at 1.1000 in the EUR/USD currency pair, which strengthens the importance of both these pivotal areas in both pairs.USDJPYThere is nothing of high importance due today regarding 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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