Analysis of trades and tips on USD/JPY
The price test of 148.70 occurred when the MACD indicator started to move down from the zero mark, confirming the correct entry point for selling the dollar further along the trend. Weak U.S. labor market data led to a powerful USD/JPY sell-off. As a result, the pair dropped more than 200 pips. In today's Asian session, the yen rose by another 400 pips, which could be a rather alarming signal for the Bank of Japan, clearly not expecting such aggressive currency rate changes following the recent decision to raise interest rates. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2 for selling further along the trend.
Buy signals
Scenario No. 1. Today, I plan to buy USD/JPY when the price reaches the entry point around 143.34, plotted by the green line on the chart, with the goal of rising to the level of 145.36 plotted by the thicker green line on the chart. In the area of 145.36, I will exit long positions and open short ones in the opposite direction, expecting a movement of 30-35 pips in the opposite direction from that level. We can hardly count on the pair's rise today. At most, we might see a correction in the first half of the day. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.
Scenario No. 2. I also plan to buy USD/JPY today in case of two consecutive tests of 141.93 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 143.34 and 145.36.
Sell signals
Scenario No. 1. I plan to sell USD/JPY today only after testing the level of 141.93 plotted by the red line on the chart, which will lead to a rapid decline in the pair. The key target for sellers will be 140.15, where I will exit short positions and immediately open long positions in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from that level. Pressure on USD/JPY may return at any moment, especially in case of unsuccessful correction in the first half of the day to the 143.34 area. Important: Before selling, ensure the MACD indicator is below the zero mark and starting to decline.
Scenario No. 2. I also plan to sell USD/JPY today in case of two consecutive price tests at 143.34 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite level of 141.93 and 140.15.
What's on the chart:
Thin green line: the entry price at which you can buy the trading instrument.
Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.
Thin red line: the entry price at which you can sell the trading instrument.
Thick red line: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.
MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.
Important: Novice traders in the forex market must be cautious when deciding to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.
Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.
