Analysis of trades and tips on USD/JPY
The price test of 146.17 occurred when the MACD indicator had already moved significantly upward from the zero mark, which limited the further bullish potential of the pair. Shortly after, another test of this price level was conducted, and it happened when the MACD was in the overbought area. However, to be fair, the dollar could have also been sold on the first test. As a result, the pair fell by about 30 pips. Closer to the middle of the US session, another test of 146.17 coincided with the beginning of the MACD moving upward from the zero mark, confirming the correct entry point for buying the dollar.
Consequently, it was possible to gain about 30 pips from the market. Today's inflation data from Japan remained unchanged at 2.8%, and the speech by Bank of Japan Governor Kazuo Ueda strengthened the yen, as there is no longer any reluctance from central banks to raise interest rates. However, everything will now depend on the statements of the Federal Reserve Chair, so the focus should be on his words and future policies. We will discuss this in more detail in the forecast for the afternoon. As for the intraday strategy, I will rely more on scenarios No. 1 and 2.
Buy signals
Scenario No. 1. Today, I plan to buy USD/JPY when it reaches the entry point around 145.91, plotted by the green line on the chart, with the goal of rising to 146.65, plotted by the thicker green line on the chart. In the area of 146.65, I will exit long positions and open short positions in the opposite direction, expecting a movement of 30-35 pips in the opposite direction from the level. We can count on the pair to rise today as part of the upward correction. 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 145.45 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. We can expect growth to the opposite levels of 145.91 and 146.65.
Sell signals
Scenario No. 1. I plan to sell USD/JPY today only after testing the level of 145.45 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 the level of 144.79, 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, since the bearish market for the dollar has not gone away. 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 tests of 145.91 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. We can expect a decline to the opposite level of 145.45 and 144.79.
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.
