Analysis of transactions and tips on trading the Japanese yen
The price test of 155.75 came at a time when the MACD indicator, although it went up a lot from zero, limited the upward potential of the pair. However, I noted that I would act on a breakdown based on data on the American economy. Considering that the figures turned out to be much higher than economists' forecasts, and the number of new jobs exceeded all expectations, I bought the dollar and sold the yen, hoping for a return of the upward trend in the pair and for a good upward movement, which at the end of the day amounted to more than 100 points.
Today's figures on the reduction of GDP in Japan put pressure on the yen, which continued Friday's trend. Quite good data on the current account balance and changes in the volume of bank lending in Japan were ignored. Apparently, the demand for the dollar will continue further than I will use it – especially in the case of USD/JPY drawdowns, which will necessarily occur as the upward trend develops. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2 for purchase.
Buy signal
Scenario No. 1: I plan to buy USD/JPY today when I reach the entry point in the area of 157.27 (green line on the chart) in order to grow to the level of 157.97 (thicker green line on the chart). In the area of 157.97, I'm going to exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). The pair's growth can be counted on today in the continuation of the bull market development. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to grow from it.
Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive price tests of 156.81 at a time when the MACD indicator will be in the oversold area. This will limit the pair's downward potential and lead to a reverse upward reversal of the market. We can expect an increase to the opposite levels of 157.27 and 157.97.
Sell signal
Scenario No. 1: I plan to sell USD/JPY today only after updating the level of 156.81 (the red line on the chart), which will lead to a rapid decline in the pair. The key target of sellers will be the 156.30 level, where I'm going to exit sales, as well as immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). The pressure on the pair may return in case of an unsuccessful consolidation in the area of the daily maximum, but this is unlikely. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just beginning to decline.
Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive price tests of 157.27 at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse downward reversal of the market. We can expect a decline to the opposite levels of 155.81 and 156.30.
What's on the chart:
Thin green line is the entry price at which you can buy a trading instrument.
Thick green line is the estimated price where you can place Take profit or fix profits yourself, since further growth is unlikely above this level.
Thin red line is the entry price at which a trading instrument can be sold.
Thick red line is the estimated price at which you can place a Take profit or fix profits yourself since further decline is unlikely below this level.
MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.
Important. Novice Forex traders need to make decisions about entering the market very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. You need to place stop orders to avoid losing the entire deposit very quickly, especially if you do not use money management but trade in large volumes.
Remember that for successful trading, you need a clear trading plan, following the example I presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
