Analysis of Trades and Tips for Trading the Japanese Yen
The test of the 147.45 price level occurred when the MACD indicator had risen significantly above the zero mark and had been in the overbought area for a considerable period. This was sufficient to justify selling the dollar, anticipating a decline after an unsuccessful attempt to maintain the daily high. As a result, the pair moved down by about 30 points. In the second half of the day, key inflation figures from the U.S. are expected, which will determine the future policy of the Federal Reserve. A sharp rise in inflation will lead to an increase in the USD/JPY pair. Conversely, a decrease in inflation, similar to the previous day, will result in new dollar sales and continue the downward trend. For the intraday strategy, I plan to act based on Scenario 1, disregarding the MACD indicator, as I expect strong and directional movements.
Buy Signal
Scenario 1: Today, I plan to buy USD/JPY when the price reaches around 147.20 (green line on the chart), with a target to rise to 148.32 (thicker green line on the chart). At 148.32, I will exit the market and sell USD/JPY in the reverse direction, targeting a 30-35 point movement from that level. A strong rise in the pair is expected today due to news of rising inflation in the U.S. Important: Before buying, ensure that the MACD indicator is above the zero mark and is just starting its upward movement.
Scenario 2: I also plan to buy USD/JPY today if there are two consecutive tests of the 146.76 price level, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. You can expect a rise towards the levels of 147.20 and 148.32.
Sell Signal
Scenario 1: I will sell USD/JPY today if the 146.76 level is breached (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be 145.62, where I will exit the market and immediately buy USD/JPY in the reverse direction, targeting a 20-25 point movement from that level. Pressure on the pair will return if there is news of declining inflation in the U.S. Important: Before selling, ensure that the MACD indicator is below the zero mark and is just starting its downward movement.
Scenario 2: I also plan to sell USD/JPY today if there are two consecutive tests of the 147.20 price level, at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. You can expect a decline to the levels of 146.76 and 145.62.
What's on the Chart:
- Thin green line: Entry price at which you can buy the trading instrument.
- Thick green line: Suggested price for placing Take Profit or manually fixing 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: Suggested price for placing Take Profit or manually fixing profits, as further decline below this level is unlikely.
- MACD indicator: When entering the market, it's important to consider overbought and oversold conditions.
Important: Beginner Forex traders must be very cautious when deciding to enter the market. It's best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, for successful trading, you need a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is initially a losing strategy for an intraday trader.
