Analysis of Trades and Tips for Trading the Japanese Yen
The test of the 147.55 price level occurred when the MACD indicator had already moved significantly downward from the zero mark, which limited the pair's downside potential. For this reason, I did not sell the dollar and stayed out of the market. We expect a much more interesting movement in the second half of the day, with the release of data such as the U.S. Producer Price Index for July and the NFIB Small Business Optimism Index. Additionally, it's important to listen to the stance of one of the hawkish Federal Reserve policymakers, FOMC member Raphael Bostic. His hawkish message could lead to a larger sell-off in USD/JPY. Regarding the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY if the price reaches the entry point around 147.75 (green line on the chart) with a target of rising to the 148.55 level (thicker green line on the chart). Around 148.55, I will close the purchases and open sell positions in the opposite direction (targeting a 30-35 point movement in the opposite direction from the level). A strong rise in the pair today may occur following a hawkish stance from the Federal Reserve. Important. Before buying, make sure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 147.13 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger an upward market reversal. Growth can be expected towards the levels of 147.75 and 148.55.
Sell Signal
Scenario #1: I plan to sell USD/JPY today after the 147.13 level (red line on the chart) is updated, which will lead to a rapid decline in the pair. The key target for sellers will be the 146.52 level, where I will close the sales and immediately open purchases in the opposite direction (targeting a 20-25 point movement from that level). If buyers show no activity around the daily high, pressure on the pair will return. Important. Before selling, make sure that the MACD indicator is below the zero mark and just starting to decline.
Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 147.75 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a downward market reversal. A decline can be expected towards the levels of 147.13 and 146.52.
Details on the Chart:
- Thin green line: Entry price at which you can buy the trading instrument.
- Thick green line: Estimated price where you can set a Take Profit or manually lock in profits, as further growth above this level is unlikely.
- Thin red line: Entry price at which you can sell the trading instrument.
- Thick red line: Estimated price where you can set a Take Profit or manually lock in profits, as further decline below this level is unlikely.
- MACD Indicator: When entering the market, it is important to consider overbought and oversold zones.
Important Notes:
Beginner traders in the forex market should be very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop-loss orders to minimize potential losses. Without setting stop-loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
Remember, successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is generally an unprofitable strategy for intraday traders.
