USD/JPY Forex Signal: More Bearish

Adam Lemon

Volatility remains low compared to other major Forex pairs.

USD/JPY: USD weakness

Yesterday’s signals produced a profitable short trade from the bearish rejection of the resistance level identified at 107.42.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered from 8 am New York time Wednesday to 5 pm Tokyo time Thursday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1071.0, 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 or 106.15.
  • 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 was prepared to trade a reversal of any spike after the Bank of Japan’s release to either 106.42, 106.15, or 108.23.

The Bank of Japan’s release did strengthen the Yen somewhat, but no spike was made to any of the key levels identified.

The price has broken below the pivotal level at 107.10 and now looks more bearish but has not yet tested the recent lows just above 106.60. Volatility remains low compared to other major Forex pairs.

We are seeing more specific weaknesses in the U.S. Dollar which is pushing the price down.

If the price can go on falling to get established below 106.00, this would be a major long-term bearish breakout.

However, I feel the best bet for traders will be betting against this, by trading long any reversals at the long-term pivotal support at 106.15 in the unlikely event this sets up later today.

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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