USD/JPY Forex Signal: Consolidating Below 106.50

Trading will be very light today in this pair before the Asian session due to the major public holiday today in the U.S.A.

USD/JPY: Further stock falls could drag the price down

Last Thursday’s signals produced a profitable long trade from the bullish doji candlestick which rejected the key support level identified at 106.02.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken from 8 am to 5 pm Tokyo time today only.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.50 or 107.07.
  • 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 106.02 or 105.78.
  • 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 would take a bullish bias if the level at 106.41 held until the New York open and then we had gotten two consecutive hourly closes above it. I was also ready to take a bearish bias if the price makes a bearish reversal off that level soon after the New York open.

The level did not hold as New York opened, but was exceeded by a few points. However, the level was close as a rough level as 106.50 held and sent the price down again. So, it was not a fruitful call, but I was on the right track of seeing the day’s pivotal point in this price area.

We now have a double top at 106.50, and a short-term consolidation pattern between 106.50 and 106.00.

I do not see either bulls or bears as having any advantage today, so I am equally prepared to take a long from a bounce at 106.02 or a bearish reversal at 106.50 as long as both levels hold into the Tokyo open.

Trading will be very light today in this pair before the Asian session due to the major public holiday today in the U.S.A.

USD/JPY

There is nothing of high importance due today regarding either the JPY or the USD. It is a public holiday today in the U.S.A.

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.