USD/JPY Forex Signal: Major Resistance at 109.23

Adam Lemon

USD/JPY: Real story is weak Japanese Yen

Yesterday’s signals were not triggered as none of the key levels were reached.

Today’s USD/JPY Signals

Risk 0.75%.

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

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 109.59.

  • Place 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.

  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 108.80, 108.43, 108.21, or 108.04.

  • Place 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.

  • 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.

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USD/JPY Analysis

I wrote yesterday that if we saw the price hold above 108.90 it was likely that the next resistance level at 109.23 would be reached quite fast.

This call did not turn out to be very accurate as although the price did hold up above 108.90 it did not reach 109.23 yet.

The main technical factor in this currency pair is the probably strong resistance level at 109.23 which marks a quite long-term high inflection point. This suggests that if it is reached, it is going to be resistant, at least for a while.

Alternatively, if the price can get established above 109.25, especially above 110.00, that will be a very bullish sign.

The USD is recovering today, but the Yen is relatively weak anyway, so I see a good chance that this pair will continue to rise whatever happens unless risk sentiment sours considerably.

For this reason, I would be prepared to enter a new long trade following a bullish bounce at any support level identified above.USDJPYThere is nothing of high importance due today concerning either the JPY or the USD.

About the Author
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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