USD/JPY Forex Signal

Last Thursday’s signals were not triggered, as the price action when the support level at 111.46 was reached was insufficiently bullish.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken between 8am New York time Monday and 5pm Tokyo time Tuesday.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 111.46 or 112.09.

  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.60.

  • 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 bears really needed to see a break below 111.46. I was prepared that day to take a bullish bias if the price could trade above 112.10 for a couple of hours, but it did not happen. Overall this was a good call as once 111.46 broke down, bears were able to push the price down further, although the downwards move seems to have ended by now. It looks clear that the former support level at 111.46 is now likely to flip over to act as new resistance.

Both currencies here are quite strong as there is more of a “risk off” sentiment in the market now, with the Yen tending to benefit most from that, as usual. The more stocks continue to sell off, the more this currency pair is likely to move down.

Today I expect that both the nearby support and resistance levels are likely to hold. The most probably opportunity would probably arrive as a bearish rejection of the resistance at 111.46 after the New York open – if that sets up, I would take a bearish bias at that point.

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There is nothing of high importance due today concerning the JPY. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time followed at 1:00am by a minor speech from the Chair of the Federal Reserve.