USD/JPY Forex Signal: Bulls Slow but Continue

USD/JPY: 106.00 area looking pivotal

Last Thursday’s signals were not triggered, as the bearish price action took place a little way above the resistance level identified at 105.39.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered between 8 am New York time Thursday and 5 pm Tokyo time Friday.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.81, 106.07, or 106.50.
  • 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 105.20, 104.87, or 104.37.
  • 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.

USD/JPY Analysis

I wrote last Thursday that I took a cautiously bullish bias above 105.20 due to the break of the bearish trend line as well as the general bullish momentum. I was prepared to enter a long trade if we had gotten a bullish bounce there.

This was an OK call as the price did retrace to a low of 105.24 before rising to what is now about 40 pips higher, although the support level I identified at 105.20 has not yet been reached.

The bullish movement has slowed but is clearly still happening as the price keeps grinding higher as risk sentiment slowly improved over recent days, which is being reflected in this currency pair.

A continuation of the bullish movement currently looks like the most likely scenario, although the price is now close to the 106.00 which may act as relatively strong resistance due to the confluence of the round number, another bearish trend line, and a horizontal resistance level at 106.07.

I will take a bullish bias if the price can make two consecutive hourly closes above 106.07 later today after New York opens.

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.