USD/JPY Forex Signal: More Bearish

Adam Lemon

The Yen is definitely looking like the strongest currency right now.

USD/JPY: 105.00 area technically very significant

Yesterday’s signals were not triggered as there was no bullish price action when the support level at 105.11 was reached.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered between 8 am New York time Wednesday and 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 105.13, 105.67, 106.15, or 106.43.
  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 104.09.
  • 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 the price seemed quite likely to reach at least yesterday’s swing low at 105.11 and maybe even 105.00. This was a good call as it happened.

I said that how the price behaved if and when this area close to 105.00 was reached would probably be revealing. This has been true to some extent, although we did not get a New York close lower than 105.00. However, it looks more and more as if the level has broken down, but it is now looking more likely that we will need the FOMC release due late in today’s New York session to give us a conclusion one way or the other.

The Yen is definitely looking like the strongest currency right now, and it often sensitive to FOMC releases. So, due to the long-term bearish trend and the significance of 105.00, I will be ready to take a short trade if the hourly close after the FOMC press conference is a downward movement and below 105.00.

USD/JPY

Regarding the USD, there will be a release of Pending Homes Sales data at 3pm London time, followed by the FOMC Statement and Federal Funds Rate at 7pm then the usual press conference half an hour later. 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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