USD/JPY Forex Signal

Yesterday’s signals were not triggered, as none of the key levels were ever reached.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be taken from 8am New York time Tuesday until 5pm Tokyo time Wednesday.

Short Trades

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.51 or 108.73.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

Long Trade

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.50.
• Put the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.

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 noted yesterday that Friday’s daily range was more than twice the average true range of the past 15 days. Such strong bearish moves usually follow through, and the was still below last week’s close but not by much. If the price kept failing to break above the lowest resistance level at 108.34 it should make lower prices still – this is almost certainly going to be today’s pivotal point and I would take a bearish bias if we got a strong bearish rejection of either 108.34 or 108.73.

This was a good call overall as the price made another down day, but the bearish price action wasn’t clean at 108.34 so did not trigger a good short trade entry.

It would be crazy not to be bearish as the odds are still on the side of the bears, with the price continuing to make new long-term lower lows yesterday. However, volatility was below average which suggests the price may be due a retracement to 108.40 or the resistance level at 108.51. I would take a confident bearish bias if the price makes a strong bearish rejection of 108.51 later today after New York opens.

There is nothing important due today concerning the JPY. Regarding the USD, the Chair of the Federal Reserve will be giving a speech at 2:55pm London time.