Analysis of Trades and Trading Tips for the Japanese Yen
The test of the 146.15 price level occurred when the MACD indicator had already risen significantly above the zero mark and had been in the overbought area for quite some time. Recently, such formations with the yen have provided opportunities to open short positions, which I did this time. However, as you can see on the chart, after a 20-point decline, the pressure on the pair subsided. There is no significant data ahead, meaning that pressure on the U.S. dollar could return at any moment. Recent data shows that retail traders are once again focusing on the Japanese yen, betting on a more aggressive rate cut by the U.S. Federal Reserve. The FOMC minutes from the July meeting will draw traders' attention later in the day, but it's unlikely we'll see anything new in them, though surprises are always possible. As for the intraday strategy, I plan to act based on the implementation of scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 146.26 (green line on the chart) with a target of rising to 146.80 (thicker green line on the chart). At 146.80, I will close the purchases and open sales in the opposite direction (targeting a movement of 30-35 points in the opposite direction from the level). The pair is likely to rise today only if sellers refrain from taking active action after the FOMC minutes are released. Important! Before buying, make sure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of the 145.91 price when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. A rise to the target levels of 146.26 and 146.80 can be expected.
Sell Signal
Scenario No. 1: Today, I plan to sell USD/JPY after the 145.91 level (red line on the chart) is updated, leading to a rapid decline in the pair. The key target for sellers will be the 145.45 level, where I will close the sales and immediately open purchases in the opposite direction (targeting a movement of 20-25 points in the opposite direction from the level). The pressure on the pair will return if the FOMC minutes reflect a dovish stance. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting to decline from it.
Scenario No. 2: I also plan to sell USD/JPY today if the 146.26 price level is tested twice when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the target levels of 145.91 and 145.45 can be expected.
Key Elements on the Chart:
- Thin green line – the entry price at which you can buy the trading instrument.
- Thick green line – the estimated price where you can set Take Profit or manually fix profits, 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 – the estimated price where you can set Take Profit or manually fix profits, as further decline below this level is unlikely.
- MACD Indicator – When entering the market, it is important to rely on overbought and oversold zones.
Important: Beginner traders in the forex market need to make decisions about market entry very carefully. Before important fundamental reports are released, 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 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, it is necessary to have a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
