SIGNAL FOREX

USD/JPY Forex Signal: Resistance Holds – DailyForex.com


USD/JPY: Pivotal point at 105.81

Yesterday’s signals were not triggered, as the price never quite reached the resistance level identified at 105.81.

Today’s USD/JPY Signals

Risk 0.75%.

Trades must be entered between 8 am New York time Tuesday and 5 pm Tokyo time Wednesday.

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.81, 106.07, or 106.50.
  • 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 105.40, 105.26, or 104.87.
  • 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 just does not want to break up above the area of confluent resistance at about 106.00. The price has more or less held between 105.00 and 106.00 for almost two weeks, which is a relatively narrow consolidation.

I thought that if the price could get established above 106.07 that would be a bullish sign.

I was correct to see that area as pivotal although it now seems this decisive range is even lower and the key level for a break is 105.81 which is confluent with a long-term bearish trend line which is shown within the price chart below.

To be safer, a break above the nearby round number at 106.00 would be even more technically significant and decisive.

I see this area at 105.81 as extremely pivotal.

I am prepared to take a short trade from that level if we get another bearish reversal there, but this top may have been put in already.

Alternatively, I will take a long trade if get two consecutive hourly closes above 106.00 after New York opens.

There are signs the recovery in risk sentiment may have run out of steam, which would point to still lower prices in this currency pair as likely to happen later today.

USD/JPY

There is nothing of high importance scheduled today concerning the JPY. Regarding the USD, the Chair of the Federal Reserve will be giving a minor speech at 3:40 pm London time.

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