USD/JPY Forex Signal

Yesterday’s signals were not triggered, as there was no bullish price action when 110.40 was reached.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken before 5pm Tokyo time Thursday.

Short Trade

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 110.60 or 110.78.

  • 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 Trades

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.27 or 110.04.

  • 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 yesterday that the price was in a ranging zone within a ranging zone, so was very hard to predict, almost equidistant between support at 110.40 and resistance at 111.46. I was looking for a fast spike to one of these levels, which never happened.

The U.S. Dollar was broadly weaker after Federal Reserve Chair Powell’s testimony before Congress yesterday, and this has helped a continuation of the short-term bearish move as the price retreats from multi-week highs. There is a short-term bearish trend, but it does not look very reliable.

There has been limited military conflict between India and Pakistan, two nuclear powers, but the market appears to be taking it calmly. Should there be an escalation, we might find the Yen getting stronger and the price moving down here.

It is hard to have any directional bias and I think this pair is probably best avoided over the coming day or so until the technical situation clarifies.

There is nothing of high importance due today concerning the JPY. Regarding the USD, the Chair of the Federal Reserve will be testifying before the House of Congress on its Monetary Policy Report at 3pm London time.