USD/JPY Forex Signal: Ranging Waves

Adam Lemon

I really do not see any good opportunities in this currency pair except for a long close to 106.00 or a short from 107.76. 

USD/JPY: Price returning to comfort zone as USD regains some ground 

Last Thursday’s signals may have produced a profitable short trade from the bearish hourly doji candlestick which rejected the resistance level identified at 107.34.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered from 8 am New York time Monday to 5 pm Tokyo time Tuesday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.10, 107.42, or 107.76.
  • 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 Ideas

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 106.43.
  • 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.

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USD/JPY Analysis

I wrote yesterday that I would avoid trading this pair as the really important action in the Forex market has been in the other majors.

I thought that bears would need to push the price below the 106.00 handle before the action here became interesting.

This was a good call as the 106.00 handle easily survived the recent downwards movement, and the price has recovered quite strongly in recent hours. It is now testing the resistance level at 107.10. If it breaks above this level, which seems likely, the price will be right back in its range of comfort.

I really do not see any good opportunities in this currency pair except for a long close to 106.00 or a short from 107.76. There are likely to be better trading opportunities in other major Forex currency pairs.

USD/JPY

There is nothing of high importance scheduled 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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