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USD/JPY Forex Signal: Strong Fall – DailyForex.com

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USD/JPY: Yet firm support at 107.85

Yesterday’s signals were not triggered as there was no bearish price action when either of the identified support levels were reached.

Today’s USD/JPY Signals

Risk 0.75%.

Trades may only be taken between 8am New York time Tuesday and 5pm Tokyo time Wednesday.

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 108.21, 108.54, or 108.61.
  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 107.86, 107.32, or 106.74.
  • 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.

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The yen is a popular asset during turbulent times.

USD/JPY Analysis

I wrote yesterday that the price looked somewhat likely to rise over the day, as long as it could stay above the flipped resistance to support at 109.23. I was looking for a long trade from a bounce at that level.

As there was no bounce at 109.23 this was enough to keep out of trouble, but my call was wrong as after New York open, the price fell very strongly, slicing quite cleanly through several support levels.

It is unusual for the Japanese Yen to rise in value so strongly while the U.S. stock market is rising firmly, which is what happened yesterday.

The price fall has been halted over recent hours at 107.86 which looks like firm support. However, if it does rise again from here, it is likely to take a few more hours to make that bullish turn.

Due to the strength of this fall, I would be prepared to take either long or short trades despite the fact there is a long-term bullish trend. A long from 107.85 could work but shorts from 108.21 or 108.54 also look attractive.

USD/JPY

There is nothing of high importance due today concerning either the JPY or the USD.

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