USD/JPY Forex Signal: Bearish Turn at 107.76?

Adam Lemon

Stocks and riskier currencies are falling today, but the main focus is a new flow into the USD, and this is pushing the price up in this currency pair despite the fact that stocks are going down.

USD/JPY: Strong USD is the key

Yesterday’s signals were not triggered as the bullish price action took place a few pips below the support level identified at 107.36.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be entered between 8 am New York time Tuesday and 5 pm Tokyo time Wednesday.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 107.76, 107.87, or 108.23.
  • 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 107.29 or 106.80.
  • 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 conditions here were a little more bullish, so I was happy to take a long trade entry if we had got a bullish bounce at 107.37 at or soon after the New York open.

This was a good and accurate call except the bullish bounce happened a few pips lower than 107.37.

The price has reached the next resistance level after moving upwards quite strongly over recent hours and is initially failing to clear the closest resistance level at 107.76, although it is too early to say that this level is likely to hold.

Stocks and riskier currencies are falling today, but the main focus is a new flow into the USD, and this is pushing the price up in this currency pair despite the fact that stocks are going down.

I think it is quite likely that either of the resistance levels at 107.87 or 107.76 are going to hold today, so if the New York open sees one of these levels hold and produce a convincing bearish reversal, it could be a good signal to take a short trade targeting the support level at 107.29.

Alternatively, if the price breaks up above 107.87 it could hit 108.23 quite quickly.

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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