USD/JPY Forex Signal: Still Bearish

Adam Lemon

105.00 area not giving any clues yet      

Yesterday’s signals were not triggered, as there was no bearish price action when the price first hit the key resistance level at 105.13.

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 105.67 or 106.15.
  • Put 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.
  • 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 Idea

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 104.09.
  • Put 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.
  • 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 due to the long-term bearish trend and the significance of 105.00, I was ready to take a short trade if the hourly close after the FOMC press conference was a downward movement and below 105.00.

These conditions were not satisfied, so no short trade signal was generated.

We are still seeing bearish price action when you zoom out, it is just that the price remains reluctant to fall much below 105.00 in any significant way.

The pivotal point in this area has been invalidated.

I will still look for short trades, and I see the thing to watch for here as either a retracement back to the resistance level at 105.67 with a firm bearish reversal there, or an hourly candlestick closing at a new low below 104.75 on above-average volatility.

USD/JPY

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